EMV Acceptance Training July, 2015 Raymond Moorman, Director of Product, EMV Agnes Sokol, Product Marketing, Enterprise Business

Agenda The EMV Story Why merchants need EMV What is EMV? Understanding EMV within Merchant Risk Profile Understanding the liability shift How it works Upgrading to EMV Implementation Options Featured Collateral Featured Sales Tools Agenda Intro: This training will cover EMV acceptance which will be divided out into several key sections: we will start with a bit of context by covering the EMV story, then discuss why merchants need EMV. We will then cover what EMV is and how we can understand it within the merchant risk profile. We will go over the upcoming liability shift and delve deeper into how EMV transactions actually work. We will then discuss how merchants go about upgrading to EMV as well as the different implementation options which are available. Lastly, we will cover a variety of new EMV resources including collateral and featured sales tools.

The U.S. Has A Major Fraud Problem Since almost all other commercial markets in the world converted to the EMV standard, the U.S. has been under siege by fraudsters. 62% of companies in the US were subject to Payments Fraud in 2014¹ The U.K. has seen payment card fraud losses drop 36% since the country adopted EMV in 2001 ² In 2011 $1.15 billion of the total $1.35 billion in debt card fraud losses (85%) stemmed from signature debit card transactions.³ • 62% of total fraud is in-person, up from 58% year before— this is primarily caused by fraudulent transactions at POS 4 *Mercury, June 2015 *Nilson Report, August 2013. *Craig Jones, UK Card Association, BBC Radio Wake Up To Money, May 20, 2013 *Lexis Nexis, September 2013

What Do Merchants Needs When it Comes To Fraud? Protection from chargeback liability for losses from fraudulent transactions A way to stop counterfeit and fraudulent card transactions at the POS A way to reduce chargeback liability To be perceived by customers as providing a secure POS experience

Merchant Risk Profile P2P – protects data in transit Tokenization– protects data at rest EMV – protects the issuer Without all 3 the risk increases to our customer

What is EMV? EMV helps prevent fraud. Chip cards produce a one time code with every transaction, making it nearly impossible to counterfeit.

U.S. Liability Shift Visa, MasterCard, Discover and American Express will implement a liability shift effective October 2015. Merchants who have not made the investment in chip-enabled technology may be held liable for card-present fraud. .

Liability Shift Scenarios Rule of thumb – liability will shift to the least secure party in the transaction Chip+SIG support will shift liability for card present counterfeit card fraud Chip+PIN would also cover Lost+Stolen, which exception of Visa

U.S. Market EMV Timeline Key dates October 1, 2015 Liability will shift to merchants for counterfeit fraud card-present POS transactions if the merchant does not have an EMV-enabled POS device April 1, 2013 Acquirer processors were required to support merchant acceptance of chip transactions. October 1, 2017 Liability shift takes effect for transactions generated from automated fuel dispensers “More than $11 billion was reported stolen due to credit and debit card fraud in 2013, up from $8 billion 2012…” -Javelin Strategy and Research 2014 Identity Fraud Report

Key Features and Benefits of EMV Acceptance Reduce risk of counterfeit, lost or stolen card fraud Reduce card skimming at the point of sale Accept foreign cards that are already EMV enabled Help keep your customer protected Improve Customer Experience at the POS Future-proof your POS by supporting emerging payment technologies

An EMV Transaction: 4 Easy Steps 1 Insert your card into the terminal facing up and chip-end first. Do not remove the card until the transaction is complete or the transaction will be canceled. 2 Follow the on-screen prompts. 3 To help ensure only an authorized user has your card, you may be required to enter a PIN or sign the receipt. 4 Remove your card when prompted.

Upgrading to EMV Merchants can get started with chip cards and contactless capable payment devices by working with their resellers and POS software providers to implement the best upgrade solutions for their business.

EMV Implementation Options The card brand cert requirement will vary for a POS developer based on how they choose to implement EMV. Stand alone terminals obviously have the most direct path to the acquirers, which is why they are the first EMV solutions we are seeing come to market. It is important to remember that each hope along the EMV transaction path has to be part of the L3 card brand certification. Contrasting stand alone with fully integrated, you can see how complex the L3 cert can be. It is important to note that if any part of that chain in the fully integrated solution changes, a separate card brand cert would need to be completed with each of the networks. The costs of these certifications can vary, but I have talked to a few developers who completed certifications in Canada, and hear a range of $50-$150k depending on resource time, testing tools used, and time it took to complete. A third approach is a semi-integrated method, where the POS initiates the transaction but hands it over to a 3rd party payment application, either residing on the POS or within the terminal device. From there the application and terminal take over conducting the EMV tranasction, and provide status information, including data needed to print EMV compliant receipts as well as provide merchant level reporting.

Implementation Planning Implementing EMV may require many changes: Hardware Application software Business and operational processes Merchant associate and customer checkout experience A successful implementation requires: Partnership with your vendors EMV subject matter expertise Associate and cardholder education

EMV Collateral Awareness: Short Guide: 5 Reasons You Should Upgrade to EMV Acceptance Infographic EMV 101 video Customer experience video

EMV Collateral Consideration: Semi-integrated One Sheet EMV Whitepaper EMV articles External FAQ

EMV Collateral Decision: Customer Tool -Back Office -Front Office

EMV Collateral Merchant Training Kit: Signage Flyers Payment guide One-sheet Glossary

Sales Tools Prospecting: EMV Talk track QRG Qualifying: Email samples – series of 3 FAQs

SalesZone https://sales.vantiv.com Where to find EMV materials? SalesZone https://sales.vantiv.com Marketing collateral

Take the EMV Challenge! Take the EMV quiz now available on ClassMarker, get 90% or higher on the first try and get a Starbuck’s gift card! The EMV quiz can be found here: https://www.classmarker.com/online- test/start/?quiz=qx4558c27ccece7b

Thank You! Thank you for taking the time to learn about Mercury EMV Acceptance.