EMV Panel: Part Two (Follow up to Last Year’s Panel) Joseph D. Tinucci, AAP, CTP Kim Smith-Gross, CTP Matt Davies, AAP, CTP, CPP 2015 ROCKY MOUNTAIN SUMMIT

EMV Liability Switch  In October 2015 liability switches from card- issuing financial institution to merchant: If merchant can’t process an EMV transaction AND the transaction is on a counterfeit card  Bad news – the majority of fraudulent transactions are from counterfeit cards  Very likely to be the first of several liability switches (more types of fraud to be borne by merchant) 2015 ROCKY MOUNTAIN SUMMIT

Processing EMV Transactions  Customer (or clerk) inserts card into terminal  Card stays in machine until transaction completed  Machine asks for either signature or PIN from customer  Machine tells customer (or clerk) to remove card  Machine will still process mag stripe- only cards (current process) 2015 ROCKY MOUNTAIN SUMMIT

PIN versus Signature  Most card issuers will send out chipcards with signature authorization Signature is useless as authorization method, just like current process Reasoning: Customers will be disrupted / inconvenienced by change in process  PIN authorization adds communication with chip in card to confirm card’s owner 2015 ROCKY MOUNTAIN SUMMIT

Fraud Expectations  Other countries have found that card present / counterfeit fraud moves from EMV-capable to non-EMV-capable merchants Then, fraud moves online Total fraud does not go down  No clear path to EMV for online transactions Designed for card-present activity, not for card-not-present transactions 2015 ROCKY MOUNTAIN SUMMIT

Where Else Can EMV Help?  Other in-person payment methods can benefit from more robust authentication Mobile payments (smartphones, tablets) Laptops with embedded card readers Radio Frequency ID (RFID) (contactless) payments  Other stuff? 2015 ROCKY MOUNTAIN SUMMIT

The Panelists  Joseph D. Tinucci, AAP, CTP Assistant Treasurer, University of Colorado (303) ,  Kim Smith-Gross, CTP Cash Manager, Catholic Health Initiatives (720) , kimsmith-  Matt Davies, AAP, CTP, CPP Payments Outreach Officer, Federal Reserve Bank of Dallas (214) , 2015 ROCKY MOUNTAIN SUMMIT