EMV

What the – MORE Anagrams and Terms? Chip + PIN EMV Chip Card Smart Card NFC

Typically includes a microprocessor with read/write capability In the Beginning….. The integrated circuit chip (“smart”) card was introduced as a more secure alternative to the mag stripe Typically includes a microprocessor with read/write capability Stores encryption data that is used during the transaction to authenticate the card and prevent cloning Enables Dynamic Authentication by assigning a dynamic value for each authorization

New POS Equipment & Functionality Contact Contactless Chip-embedded cards, key fobs or mobile phones are held in close proximity to the terminal (“Tap-and-Go”) Chip-embedded card is inserted into the smart card reader Contact points on the chip make contact and communicate with the terminal RF field from the terminal powers and communicates securely with the chip (NFC)

EMV – The New Standard Main Functions: Established in 1994 by Europay, MasterCard and Visa Primary purpose: Define a global standard for credit and debit card acceptance via chip card technology Main Functions: Card authentication to protect against counterfeit cards Cardholder verification to protect against lost/stolen cards Terminal authentication to protect against “Trojan Horse” hacks Transaction authorization using Issuer-defined rules

For the Merchant For the Cardholder EMV Benefits For the Merchant More secure transactions Fewer chargebacks Help foster adoption of other payment technologies, such as NFC and contactless For the Cardholder Fraud reduction Foreign travelers can use chip cards in the U.S., and vice versa

EMV Adoption Worldwide Adoption Financial impact in the U.S. 1.5 million payment cards (40 percent) 20 million POS terminals (70 percent) Financial impact in the U.S. 15 million POS devices = $6.75 billion 360,000 ATMs = $500 million 1.13 billion credit & debit cards = $1.4 billion Cost of mag-stripe card: 15 cents Cost of EMV chip card: 2-4 dollars

Fraud Migrates to the U.S. 10/8/2017 41.1% of cards 76.7% of terminals 84.4% of cards 94.4% of terminals 20.6% of cards 75.9% of terminals 28.2% of cards 51.4% of terminals 14.5% of cards 68.1% of terminals

Fraud Reduction Stats in the U.K. Fraud by credit and debit cards fell by more than 25% from 2008 to 2010 Counterfeit card fraud – skimming and cloning – fell by half Fraud via lost or stolen cards at lowest levels in 10 years Source: The UK Card Association

Key EMV U.S. Adoption Dates October 2012 - TECH Innovation Program PCI validation relief for Level 1 & 2 merchants that adopt dual-interfaced solutions in any year that at least 75% of merchant transactions originate from a chip-enabled terminal NOTE: The equipment cannot simply be “EMV ready”; the merchant must be able to process EMV and NFC transactions April 2013 - Acquirer Chip Processing Mandate Acquirers and processors must demonstrate the ability to process EMV transactions and NFC contactless payments October 2015 - Liability Shift to Merchant Merchants of any size will be liable for domestic and cross-border counterfeit fraud committed at the point of sale if they are not using a compliant EMV and NFC processing solution Who is liable? Chip card read by mag stripe – the merchant Mag stripe card on an EMV/NFC terminal – the Issuer

What is Elavon doing about EMV? Infrastructure Updates E4 and ISO 5853 messages are being updated to support the requirements Elavon NA development utilities like viaConex are being updated to support the E4 specifications New Equipment Solutions New terminal offerings which are EMV- and NFC-capable Roadmaps for Elavon gateway solutions are still being defined EMV Availability Retail and restaurant Credit, PIN debit, EBT, EGC In development: ECS, DCC and Lodging EMV beta targeted for May/June 2013 (EMV terminals deployed today are EMV-capable and can be updated remotely when the service is available) Legacy terminals will not be able to support EMV

Ingenico Telium iCT220 iCT250 iWL250 Optional Peripheral Ingenico PINpad iPP320 Works with iCT220 or iCT250 MSR EMV iCT220 Countertop Dual Comm Internal PIN pad EMV iCT250 Countertop Dual Comm Internal PIN pad EMV and NFC iWL250 Portable (GPRS) Internal PIN pad EMV NFC

Optional Peripherals/Accessories VeriFone Evolution Vx520 Countertop Dual Comm Internal PIN pad MSR EMV NFC Optional Peripherals/Accessories VeriFone PINpad Vx820 Customer-facing MSR EMV NFC

VeriShield Retain All Elavon-deployed VeriFone Vx520 terminals and Vx820 PINpads will be “locked down” via VeriFone’s new VeriShield security feature, preventing unauthorized access to the terminal and software and improving customer retention. Signed (locked) terminals must be unlocked by the old processor to enable reprogramming by the new processor. Adding a 3rd-party application to an Elavon-signed terminal: Terminal Management completes a Multi-Application Compatibility Review (MACR) 3rd-party vendor submits their application file for the Application Signing Approval Process (ASAP)

What is Elavon doing about EMV? Infrastructure Updates E4 and ISO 5853 messages are being updated to support the requirements Elavon NA development utilities like viaConex are being updated to support the E4 specifications New Equipment Solutions New terminal offerings which are EMV and NFC-compatible Roadmaps for Elavon gateway solutions are still being defined Product Innovation Elavon is exploring innovative security and mobile solutions (such as mobile wallets) that will tap in to new revenue and growth initiatives as these technologies take hold in the industry

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