EMV Overview by DPS

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"EMV is a global standard for credit and debit payment cards based on chip card technology" taking its name from the card schemes Europay, MasterCard, and Visa that developed it. The standard covers the processing of credit and debit card payments using a card that contains a microprocessor chip at a payment terminal.


<ul><li>1.EMV OverviewPREPARED AUGUST 2012</li></ul> <p>2. INTRODUCING DPS | PAYMENT EXPRESSWE EMPOWERWE EXECUTEWE UNDERSTANDPAYMENT TECHNOLOGY FORTHE ATTITUDE AND KNOWHOW TO PAYMENTS TO THE FULL,YOUR ADVANTAGECONSTANTLY DELIVER GREAT RESULTSAND WORK WITH A LEADINGNETWORK OF PROVIDERS Industry leading payment solution providerSOLUTIONSSCHEME PARTNERSInnovative full-end-to-end Interwoven team OURProduct innovation. VISAcloud-based payment platform ESSENCE skills striving to Excellence in MasterCardprovide the bestdeployment and AMEX / JCBE-Commerce solutionssupport Diners DiscoverOn/Off Street ParkingOUR China Union PayHOW WEEXECUTION PEOPLEVending CONVERT OURBANKING RELATIONSHIPS TECHNOLOGYPOS Terminals FOR YOURADVANTAGE ANZ ASBFull Web-Based Reporting Bank of New Zealand Bank of South Australia Openness, Leaders in Bank West OUR CULTURAL enthusiasm, Barclaycard paymentand a passionOUR SERVICES developmentVISIONFIT for customer BOQ satisfaction CitigroupCore disciplines for your advantage Commonwealth Bank Elavon Europe 24/7 Support Service EMSSNAPSHOT EVIDENCE HSBC UK Project Management HSBC International DPS AT A GLANCE OUR CREDENTIALS Kiwi Bank National Australia Bank Development Established 1997 15,000+ merchants Standard Bank South Africa Subsidiaries in Sydney, Direct VISA link Standard Chartered (Asia) Quality Assurance New York and London Per $20b of transactions p.a St George Certified in 10+ regions with Exceeds global security US Bank (Elavon) Wells Fargo Business Analysis multiple banks and schemesstandards All IP and infrastructure Largest independent IP Westpac AU / NZ owned by DPSPayment Gateway in Westpac Pacific Islands Australasia 3. UNDERSTANDING EMVWHAT IS EMV? EMV is a global standard for credit and debit payment cards based on chip card technology EMV is also known throughout the world as Chip and PIN, ICC, and IC Credit EMVCo is the governing body maintaining EMV specifications and Approvals EMVCo members are American Express / JCB, MasterCard, and Visa Advanced security measures and advanced cryptography reduces exposure to fraud Aims to establish a common foundation for global payments and acceptance 4. UNDERSTANDING EMVWHY GO EMV? Global interoperability of services Secure contactless payment methods reflects current trends in technology Allows for offline card verification and approval Designed for the future, allowing the delivery of payments beyond traditional mag strip cards Carries Risk Management Parameters to reduce unauthorised payment risks Digitally signs payment date for reduction of fraudulent transactions via advanced security Protects against counterfeit fraud through authentication of the chip card 5. TERMINOLOGYKEY WORDS EMV - Europay, MasterCard and Visa developed standard to reduce transaction fraud EMV Level1 - Covers physical, electrical and transport level interfaces EMV Level2 - Covers payment application selection and transaction processing NFC - Near Field Communication (used in smart phone / m-commerce payments) PCI - Payment Card Industry Standards Security Council that sets payment security standards CAT/UPT - Cardholder Activated Terminal/Unattended Payment Terminal PCI PTS 3.x PCI Device certification, formerly PCI PED. No Customer Verification Method - No CVM 2 Key Triple Encryption - K1 !=K2; K1=K3 - Data Encryption Standard 168 bit encryption Digital Signatures - Data authentication PCI-DSS - Payment card industry data security standard Unattended/Attend/Semi-Attended - Levels of supervision for card readers 6. UNDERSTANDING EMVTHE EMV PROCESS Application Selection &amp;Offline DataReadingAuthentication Card HolderVerification Terminal RiskTerminalDetermine the Assessment Card Actionapplication to use Static Data Action Analysis(Visa, MasterCard) Authentication (same Analysise.g. signature, PIN,&amp; then reads the Key), dynamic DataNo CMV Terminal decides ondata Authentication (a e.g. Floor Limits what it is going to ask TC Offline new key each time) the cardApproval | ARQC Online Authorisation | AAC Offline DeclineTerminal Verification Results 7. UNDERSTANDING EMVLEVEL 1 L1 EMV KERNEL APPROVALDesigned to ensure the TERMINAL CHIP READER conforms to the EMV SPECThe transfer of data between the credit card and terminalLEVEL 2 L2 EMV KERNAL APPROVALDesigned to ensure the SOFTWARE conforms to the EMV SPECEMV Applications i.e Payments.Non-EMV application functions such as POS hardware. Messages to an Acquirerhost are not viewed as a KERNEL function Terminal Application EMV KernelHigh Level APIEMV Certifiable Lower Level APITerminal HardwareLEVEL 3 END TO END APPROVALCertifying Device; Software, Gateway &amp; Switch with Merchants Acquirer andSchemes e.g. Visa ADVT and MasterCard MTIP certifications 8. EMV AT WORK CARDHOLDER / ATTENDED BY MERCHANT EXPERIENCEStep 1 Swipe cardService Code = 2xx2 = Chip PresentPlease insert the ChipCard 9. EMV AT WORK CARDHOLDER / UNATTENDED EXPERIENCEStep One Step 2Insert into dual Chip &amp;Leave in reader but retainTrack2 magstripe [nonpossession of the card untilmotorised] readerprompted to remove after transaction completed 10. EMV AT WORKOFFLINE VS. ONLINE PIN Self selection of PIN to cardholders should typically be offered by issuers A secure process for PIN change and PIN unblock will be necessary (if PIN is forgotten) Synchronisation must occur when the online or offline PIN is changed Online PIN is in the Issuers Host Issuer HostOffline PIN is in the Chip 11. WHERE IN THE WORLD IS EMV?CanadaEurope66% of cards More than 70% of cards75% POS are EMVMore than 40% of ATMs 90% of ATMs/POS are EMV EMV enabledAsia Pacific 30% penetration of cards and over 50% of POS services ATM migration growing over 200% year on yearLatin AmericaMiddle East &amp; Africa More than 80% of 7 markets at over 40% EMV acceptance now EMVinfrastructure penetration enabled 10 markets at over 80% ATM Most prominent in Brazil,penetration Mexico, Peru, Venezuela EMV year on year growth of and Colombia36% cards, 25% POS and 39%ATMsData sourced from MasterCard, May 2012 12. WHERE IN THE WORLD IS EMV? GLOBAL EMV STATISTICS PART ARegionEMV CARDS Adoption RateEMV TerminalsAdoption Rate Canada, Latin182,185,043 26.4%2,000,000 55.6%America and theCaribbeanAsia Pacific305,126,927 26.6%3,200,000 41.6%Africa &amp; the Middle16,841,874 13.7% 348,00062.5%East Europe Zone 1555,688,434 65.4%9,400,000 84.7% Europe Zone 2 22,817,271 11.5% 457,80061.2% Total 1,082,659,549 36%15,405,800 65%Figures sourced from American Express, JCB, MasterCard and Visa. As reported by their member financial institutions globally 13. WHERE IN THE WORLD IS EMV? GLOBAL EMV STATISTICS PART B1 Billion+Global EMV-Compliant cards18 MillionGlobal EMV-compliant POS Terminals+60%Global EMV penetration (75% excl. US)+18%Global EMV Card growth rate (mid 2010-mid 2011)+32%Global EMV POS terminal growth rate (mid 2010-mid 2011) 633 Million+ EMV MasterCard-branded cards (35% of all MasterCard cards)EMV-compliant ATM terminals that accept MasterCard-branded EMV cards 20 Million+(39% of all MasterCard ATM terminals)EMV POS terminals that accept MasterCard-branded EMV cards (62% of740,000+all POS terminals accepting MasterCard) 100 Million+New MasterCard-branded EMV cards each year3,000+ MasterCard Chip Migration Services delivered globally1,700+ Customer banks supported on EMV Chip deployment to date130+ Countries in which EMV is being rolled out for MasterCard productsSourced from MasterCard customers, regional offices and QMR May 2012 14. US LIABILITY SHIFTUNDERSTANDING THE SHIFTLiability shift for domestic and cross-border counterfeit card-present point-of-sale (POS) transactionsA card-present counterfeit fraudulent chip enabled card transaction isperformed on a Non-EMV POS device the liability shifts to the merchantIf performed on a EMV approved device then the liability shifts to theissuer / acquirerMerchant needs to discuss with their Acquirer how this liability shiftapplies to them 15. HOW WILL IT AFFECT THE PARKING INDUSTRY?KEY IMPACTSEMV incorporates advanced encryption algorithms, increasing securityand reducing fraudWill help decrease losses from card-related fraud by enablingcardholder verification methods, which can offset CAPEX investmentWith the implementation of contactless, payment and exit times areaccelerated which can combat longer EMV processing timesAdapting point of sale systems to accommodate new cardholderexperienceFacilitates the introduction of new payment technologies e.g. NFC,Contactless, m-commerce. 16. THE EMV FOOD CHAINMerchant AcceptorVendor SupplierInvest in EMV technology Integrate certified EMVupgrades hardware and/or software technologyComprehend what EMV / Integrate technology to bestPCI obligations it has as a practicesmerchant Manage relationships withLook to establish workingEMV equipment suppliers &amp;groups EMV payment processorsTraining of staff STAKEHOLDERSCard Acquirer / Issuer Payment Processor Gateway Confirm Liability Assist Merchants and Acquirers ParametersFacilitate merchant transactions Upgrade &amp; MaintainBe an interface provider Systems to supportbetween merchants systems manage EMV data and the acquirer / issuer Stay EMV &amp; PCI compliant 17. STRATEGIES FOR PARKING AUTHORITIESCONSIDERATIONS / PLANNING / IMPLEMENTATION STRATEGIES Develop a EMV technology upgrade and staff training roadmap Consider &amp; analyse the cost of upgrading parking meters, pay stations, entry &amp; exit barriers Research and Invest in EMV certified terminal hardware and software technology Analysing traffic flow and determining the best location to pilot EMV before a complete rollout Understand traffic flow to maximise use of EMV in most traffic congested areas Plan to implement contactless for improved efficiency of payment Monitor best locations for EMV to minimize time spent searching for payment Understand the liability shift and impact on processing fees, charge-backs and fines 18. CONTACTStuart McGregor Business Development ManagerStuart.McGregor@paymentexpress.com@ Linkedin@ Twitter www.paymentexpress.com </p>