1. EMV Impacts & Migration
07/12/2018

2. Agenda Oberthur Card Systems
Global Market for payment cards & EMV migration
EMV overview
Oberthur & the EMV migration
An Example: EMV migration in the UK trends & benefits
Futur for EMV
EMV migration: the price to pay & the best advices
EMV migration as an opportunity
07/12/2018

3. Oberthur Card Systems
The world’s leading provider of payment cards for banks
More than 5,000 financial banking institutions supplied in 20 years
n°1 supplier of Visa and MasterCard stripe and smart cards
More than 150 EMV projects on all 5 continents
Over 150 millions EMV cards issued and personalised
Recognised worldwide leader of smart card personalisation
“Banks recognised Oberthur Card Systems as the best card and personalisation supplier to help them facilitate their EMV migration”
2003 Frost & Sullivan award for Brand Recognition in the banking market:
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4. Global Market for payment cards
9,4%
16,8%
7,9%
8,7%
8,3%
6,3%
6,5%
7,1%
7,4%
7,5%
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Units, Billions
Financial cards
Banking cards
Financial cards are banking cards and loyalty applications including e-purse, petroleum, store cards,…
Banking applications compose 82% of market and are main drivers for its future evolution
Smart Cards: roughly 20% of banking cards in the field in 2005
EMV cards: roughly more than 30% of total smart cards in the field in 2005
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5. Main Contributors to EMV migration
On the end H in the world were around 330 Mln EMV cards
European countries had more than 70% of all EMV cards in the field.
UK, France & Germany emitted more than 40% of all EMV cards.
EMV cards in M.:
UK: 110
Germany: 42
Japan: 40
France: 30
Belgium: 10
Austria: 8
Turkey: 7
Brazil: 7
Others: 75,5
Germany
13%
Japan
France 9%
Taiwan 2%
Italy
Brazil
Belgium 3%
Turkey
Austria
Spain 1%
Malaysia UK
34%
Others
17%
12%
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6. EMV at a glance
1996: first release of the specifications by Europay, MasterCard and Visa
Trend driven by the need for interoperability, enhanced security, reduce transaction cost and high quality services
Migration to EMV standards is the banking sector’s number one challenge at an international level
Move is generalised throughout the world, but strategy and choices of products are different
Geography of fraud liability : varies depending on the region, from 2005 to 2010
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7. EMV Opportunities for Issuers
07/12/2018
EMV Opportunities for Issuers
Secure payment anywhere
Multi-application
Pre-Authorised debit
Authentication
Data Storage & loyalty applications
Contactless Payment …
Enhanced Risk management & Customer management
More services for the “high end” cardholders
Less risks with “low end” customers
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© 2004 Oberthur Card Systems.

8. Oberthur & the EMV migration
More than 150 EMV projects
Europe & CEI : France, Italy, Spain, UK, Eire, Belgium, Netherland, Germany, Switzerland, Sweden, Norway, Lettonia, Lithuania, Estonia, Czech Republiq, Poland, Hungary, Slovakia, Slovenia, Ukraine, Russia, Kazakstan, …
Middle East & Africa: 17 countries, Cameroun, Zimbabwe, Ghana, Kenya, Cyprus, Israel, Kuwait; Oman, Sausi Arabia, Turquie, Egypt, Libanum, Quatar, UAE…
Asia-Pac: Australia, Korea, Taiwan, Thailand and China,…
North America: Mexico, Canada (few projects in the US
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9. An Example: EMV migration in the UK
History
UKIS introduced in 1996.
Main driver was to reduce fraud loss
Major difference, though: no pin on UK cards until 2003
Chip and pin introduced since beginning of the year
APACS promotes interoperability and develops standards in the UK payment industry
“Today”
140 M cards in 2004
Penetration rate : 67% of the adult population
€ 464 bn Transactions
Market projected to increase by 36.2% in volume between 2003 & 2008
Fraud is still a major problem, with £ 438 M lost in 2003
90% of consumer spending by card takes place in the UK
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10. EMV migration benefits in the UK
Regular increase in the number of transactions: 58% between 1998 and 2003
Fraud has slowed down as EMV is generalised
Remains high due to relatively slow PIN acceptance
Introduction of Pin estimated to save € 1,4 bn until the end of the decade
New services with EMV cards are now proposed (online authentication,…)
No PIN
PIN promoted
450
400
350
300
250
200
150
100 50
1997
1998
1999
2000
2001
2002
2003
2004
2005
Fraud (£ million)
%UK debit/credit cards
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11. Futur for EMV New Applications around EMV Already there
EMV Authentication
Answer card not present type of fraud (mainly Internet transactions)
Applications for secured online banking & for secured online shopping
For the “near” future
Data Storage for loyalty, e-ticketing,…
Contactless Payment
Transit / Payment convergence?
Mobile payment? …
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12. EMV migration: the price to pay
Migration entails necessary update of back office equipment and terminals
UK: Total projected costs of Chip and Pin for banks and retailers: € 1,6 Bn
France: estimated cost thus far amounts to 1 Bn €, for banks only
In addition, banks must understand the new security requirements
Key management and associated cryptographic algorithms
On-card risk management
Technical training is necessary for concerned staff to adapt to the new specifications and requirements.
When current card personalisation is done in-house, banks must migrate their bureau or outsource the personalisation
Upgrade of existing capabilities, update in data processing and modification of personalisation software
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13. EMV migration: the best advices
Establish the business need
Volumes and and Time Frame for Card issuances
What kind of applications (Just Payment or Multi-application (authentication for home banking, data storage for loyalty, contactless payment,…)
Is it necessary to propose specific applications for specific set of customers ?
How to manage personalisation (usual issuance but also premium customer card replacement or personalisation of non payment applications)
Chose the right smart card technology
Native designed for volumes but can provide multi-application
Platforms (JavaCard but also Multos) are more flexible but for higher costs
Take into consideration that:
Simplest solution is the quickest way for the EMV migration.
Value Added Solutions to an EMV card is a key to differentiate issuer offers.
Design & Plastics bring also differentiation ( in the hands of the cardholder the payment card is the business card of the bank )
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14. EMV migration as an opportunity
EMV is not just for Fraud Reduction
and Value-Added Solutions
EMV Authentication
Loyalty
Data Storage
EMV is the opportunity to:
Customize cards to Cardholder needs
Improve Card Holder Segmentation and Services
Leverage your brand and financial services investments
07/12/2018

15. Thank you for Your Attention ! Questions ? 07/12/2018
© 2004 Oberthur Card Systems.