1. Terminal Risk Management

2. Agenda Terminal Risk Management in the End-to-End Process
Types of Terminal Risk Management
Visa recommendations
Summary

3. Chip End-to-End process
AUTHORISATIONS
Offline PIN
Validation
Card holder
verification method
Terminal Risk
Management
iCVV checking
ATC checking
Card Risk
Management
ISSUER HOST
Online CAM
Online PIN
Script processing

4. Types of terminal risk management
Processing restrictions
Terminal risk management
Terminal action analysis
Terminal Risk
Management

5. Processing restrictions
Domestic transactions
International transaction
Domestic goods
International goods
Domestic services
International services
At ATMs
At terminals other than ATMs
Domestic cashback allowed
International cashback allowed
Application Usage
Control
Can this transaction proceed?
Version number check
VIS ‘v’ VIS 1.4
Card Date Check
Effective Date
Expiry Date
Check the Location and Device
Terminal Country Code
Card Country Code
Terminal Risk
Management

6. Terminal risk management
Traditional Terminal Risk Management
Terminal Exception File Check
Merchant Force Online
Random Selection
Floor Limit Check
IMPORTANT NOTE:
If the terminal floor limit is
exceeded the transaction WILL
attempt to go online, irrelevant
of the cards requirements
Terminal Risk
Management

7. Terminal action analysis
Terminal reviews the transaction so far
Record events so far
Have any exceptions been triggered such as
Floor Limit, Expired Card, Usage?
Can I support online, decline and default
transactions?
Record ‘position statement’ in the Terminal
Verification Result (TVR)
Apply actions provided to me by the Acquirer
Apply Terminal Action Codes
Request a response from the card
(Online, Decline, Approve)
Terminal Risk
Management

8. Terminal action analysis
Terminal Action Codes (TAC’s)
Provides the Acquirer with certain transaction protection when exceptions are detected
A set of conditions where the terminal will want to:
Decline the transaction NOW
Approve the transaction
Request an online authorisation decision from the Issuer
If unable to go online decide to decline because of a certain condition
Terminal Risk
Management

9. Visa recommendations (TAC’s)
Decline NOW if
Go Online if:
If unable to go online decline
Service not allowed
Offline authentication not performed or failed
PAN on exception file
Card expired
Online PIN entered
Exceeds floor limit
Offline limits exceeded
Randomly selected for online
Merchant forced online
NOTE:
If none of the conditions are met the terminal will request that the transaction approves offline
Terminal Risk
Management

10. Summary
EMV Terminal Risk Management is an extension of magnetic stripe processing
Consider domestic processing (BIN Table processing)
TAC’s need to be implemented
Terminal Verification Result is vital to transaction audit trail
Transactions above floor limits will also attempt to go online
Terminal will request a response from the card before taking any further action
Next session
Send the Terminal Request
to the card
Terminal Risk
Management

11. Floor Limits and How they Impact Chip
Floor limits where very common in some markets and in some cases still are.
If floor limits exist they can be checked by the chip process and used if they fit in to the process.
They do not override the chip.
If the merchant use them, they are liable for any fraud under standard scheme rules