1. Contactless RF Payments Delivering Merchant and Consumer Benefits Trevor Pavey Texas Instruments

2. Card Industry - Historical Overview

3. The radio waves are generated by the reader’s antenna. A tag in the RF field uses energy from the radio waves to respond to the reader’s commands Contactless Payments – Wave and go…

4. TI-RFID: 15 Years of Innovation RFID provider since 1989 Leading transponder supplier Approaching 500 million tag milestone –150 million keys for anti- theft –60 million in livestock tracking –25 million library books –>8 million using Exxon/Mobil Speedpass –>4 million trays tracked by Marks and Spencer

5. ExxonMobil’s Speedpass More than 8 million active members More than >8900 locations in the US Operational for more than 8 years. Keyfob most popular form factor Source: NACS online, Mar 2005

6. American Express ExpressPay Pilot launched in Phoenix in July 2003 Nationwide launch June 1, 2005 Many well-known brands -- Carl's Jr., CVS, Dairy Queen, Kwik Kopy Printing, Quiznos Subs and Schlotzsky's Deli Announced CVS Pharmacy as first national merchant Results measured: Transaction speeds averaging 12.5 seconds –63% faster than cash –53% faster than card transactions

7. Consumer Benefits Faster than Cash or Credit Increased Convenience - Wave and Go No Fumbling for Cash Reduced Queues Automated CRM Promotions Improved Satisfaction with More Targeted Offers Loyalty Rewards

8. Merchant Benefits Reduced Transaction Time and Queues Faster than Cards and Cash Increase spend on traditional cash transactions >40% increase in cafeteria pilots Simplifies Reconciliation Minimizes Cash Shrinkage Safer, More Secure Transactions Enables Consumer Identification for CRM

9. Contactless Payments – How secure is the transaction?

10. Equipment being installed on front of existing bank card slot The equipment as it appears installed over the normal ATM bank slot. Magstripe Fraud

11. The RF Payment Ecosystem

12. RF(ID) layer The RF Interface and Security... Physical 13.56 MHz RF Communications ISO 14443 – 2 A&B ISO 14443 – 3 A&B ISO 14443 – 4 A&B Security & Application layers e.g. ExpressPay Paypass Physical Layer Data Link Application ‘Interface’ Application ‘Interface’ Application ‘library’ Application ‘library’ Session Security Access Security Access Application Tag Reader

13. Contactless Payments Security The secure IC embedded on the payment token uses dynamic data encryption which changes after every transaction. The encryption solution uses the worldwide standard 128- bit triple DES algorithm. < 4cm

14. Acceptance Is Rapidly Growing Blue from American Express launched nationally on June 1st “Blink” launched 1MM cards in Atlanta and Denver with Visa and MasterCard Launched Philadelphia Eagles co-brand card with MasterCard Launching nationally 5,300 store rollout5,400 store rollout11,000 store rollout500 store rollout200 store rollout

15. Unlimited form factors

16. Contactless RF Payments Delivering Merchant and Consumer Benefits Presented By: Trevor Pavey Texas Instruments