1. EMV® UPDATE
October 2014

2. Discussion Topics
Hear important information regarding Fiserv support for the transition to the EMV standard.  Fiserv deployment plans and support initiatives will be announced to provide you with insight into our approach for addressing impending payment card changes.
Market landscape overview
What actions should financial institutions be taking
What is the Fiserv Solution
What is the time line to transition your card and ATM program to EMV

3. EMV Adoption in the U.S. Why It Makes Sense
Improved security
Better experience for international travelers
Worldwide interoperability
Positioning the industry for future forms of payments and security (tokenization)
So EMV does make sense to be adopted in the U.S. because of
The Improved security
Better experience for international travelers
Worldwide interoperability, and
Positioning the industry for other forms of payments – namely NFC

4. All transactions on any MasterCard network
Liability Shift Dates
P.O.S.
October 2015
ATM
October 2017
April 2013
Specific to cross border Maestro transactions where the issuer is Non-U.S. at a U.S. ATM
October 2016
All transactions on any MasterCard network
Pay at Pump/Gas
The push to jumpstart the migration of EMV in the U.S. began in August 2011 when Visa made an announcement to accelerate chip migration and adoption of mobile payments in the U.S. by setting processor requirements, retailer incentives and shifting the financial liability of fraud to those who are non compliant. MasterCard, Discover and American Express announced their plans as well. With all four major card associations on board for EMV adoption, the wheels were put in motion.

5. State of the Union 2013 in Review
Debit Issuers
Credit Issuers
ATM Deployers
Merchants
“Wait and See approach”
Progress dependent on legal outcomes around Reg II and PIN network engagement in EMV
Visa reports 3.5M EMV cards issued in US as of 1Q % of all US issued cards.
Large credit issuers have begun issuance mostly to business, commercial traveler segments (Bank of America, Citibank, JPMorgan Chase, US Bank)
Some credit unions have begun issuance (Andrews FCU, United Nations FCU)
Handful of US based ATMs accept EMV
Most terminal owners deploying readers but not enabled through kernel software
Windows 7 convergence driving some movement to “single dip” manufacturer costs
Big box retailers are beginning EMV deployment
Wal-Mart terminals EMV enabled but en masse lack the software kernel to process EMV transaction
Best Buy and Home Depot announced plans to be EMV compliant
Most smaller retailers taking a wait and see approach
Impact of compromise and threats of future ones

6. EMV Landscape
Scale and depth of recent merchant compromises influencing the market view on EMV
Debit issuers desire a path forward to mitigate Card Present fraud
Merchants fear being “next”
EMV has entered the consumers conscience
Visa and MasterCard commitment to announced liability shift dates
A regulatory compliant path for debit issuers
Accel™ Debit Payments Network from Fiserv agrees to license the MasterCard and Visa offering UAID (Universal Application Identifier)
EMV Migration Forum developed an EMV specification that future proofs regulatory requirements

7. EMV Answering the Top Compromise Questions
Did the fact that the US was not EMV-enabled influence the breach?
Yes. Fraudsters will focus on the payment system of least resistance.
Would EMV have prevented the data being compromised?
No. EMV would not have thwarted the fraudsters’ efforts. In these situations the data compromised was card data housed on merchant systems.
Would EMV have mitigated the compromise impact?
Yes. EMV would prevent the fraudsters from creating new plastic with the stolen information. The chip on an EMV card has certain information programmed to the chip that would make counterfeiting of that particular card very hard to do. Each EMV transaction creates data that is unique to that transaction. Replication is virtually impossible.
Does EMV protect against all forms of fraud?
No. EMV cards do not protect/prevent Card Not Present (CNP) fraud.
When will EMV prevent counterfeit fraud?
It is a journey. In reality EMV would need to be broadly deployed in the US across cards issued, merchant devices and ATM machines to materially combat Card Present fraud.

8. Consumers Are Drawn to the Enhanced Security of Chip Features and Benefits Offered by Chip Cards
Source: Harris Interactive, EMV Chip Card Research, June 2013, commissioned by MasterCard

9. Fiserv, MasterCard reach EMV debit routing agreement March 12, 2014
Fiserv, MasterCard Agreement Advances Debit EMV Adoption in the U.S.
March 12, 2014
MasterCard, Fiserv Enter Pact on EMV Debit Routing March 12, 2014
MasterCard, Fiserv Partner on Debit EMV for Accel Network March 12, 2014
Fiserv to Advance Debit EMV Adoption in the U.S. through Visa’s Common Solution
March 17, 2014
Bowing to EMV’s Urgency, Accel Adopts MasterCard’s Common Debit Solution March 12, 2014
MasterCard EMV debit cards to run over Accel network March 12, 2014
How Fiserv's Long, Rigorous EMV Path Led It to MasterCard March 13, 2014 9

10. Fiserv in the News

11. EMV Answering the Top AID Questions
What is an AID?
An identifier instantiated within terminal kernel software and personalization in the payment application. A matching AID must exist between the card and terminal to enable an EMV transaction (e.g. Visa, MasterCard have defined AIDs distributed globally).
Does the AID control routing?
No. Bin-level routing will continue in an EMV environment, preserving merchants’ right to least cost route.
What is the UAID?
It is a unique identifier that has been created specifically to represent debit in the US Market. It is not brand-specific. This identifier will enable all players in the payment landscape to utilize a single identifier to associate any debit network they issuer or accept. This identifier must be broadly deployed in all debit accepting devices and personalized on all debit card products for licensed networks.
Why is the Accel announcement so significant?
Accel is the first debit payments network to license both the Visa and MasterCard UAID, offering its merchant and issuer communities a path forward to transition to EMV. These agreements provide a regulatory compliant solution for all stakeholders in market.
What if my unaffiliated network is not Accel?
Fiserv is not in a position to speak to what the other debit networks in the US markets plans are to support the transition to EMV nor their status relative to licensing the Visa and MasterCard solutions.

12. Recommendations for EMV Deployment
Migrate card portfolios and ATMs to EMV enablement over time
Transitional approach
Deploy EMV with the capabilities required for security benefits/compliance protection; extras can come later
Go with a compliant strategy
Time to plan for action is now
Plan on a course of action
International traveler segment
Focus on cardholder expectations
Focus on credit first.
Issue debit cards personalized with the UAID to avoid reissuance
Prioritize
ATM upgrades as part of a larger initiative to upgrade ATM relative to end of life of Windows XP operating systems
Evaluate investments as part of a larger initiative
We recommendation a transitional approach to EMV deployment. [review list]

13. What Can/Should You Be Doing
Understand your card personalization options and associated expenses
Contact vs. Dual Interface
Online vs. Offline
Chip Size (12k vs. 16k)
Address how you assign PAN numbers
EMV requires each cardholder to utilize a unique PAN for application transaction counter (ATC) increment authentication
Our first recommendation is to understand your personalization options and associated expense
Contact vs. Dual Interface
Online vs. Offline
Chip size (12k vs. 16k)
Fiserv Card Services recommends Contact, Online and 12k chip
Address how you assign PAN numbers
Do you assign a unique PAN for each cardholder?
EMV requires each cardholder to utilize a unique pan for application transaction counter (ATC) increment authentication

14. What Can/Should You Be Doing
Review Your Card Designs
Our first recommendation is to review your card designs
You will likely need to redesign or re-position your logo to accommodate the location of the chip on the front and back of the card.
You may want to evaluate the launch of new designs with the new chip cards

15. What Can/Should You Be Doing
Analyze your portfolio -
Identify international travelers that may likely want/need to be early adopters
Evaluate current reissuance cycles - Consider reducing the duration to more closely align with liability shift dates
Analyze your portfolio
Identify international travelers that may likely want/need to be early adopters
Evaluate current reissuance cycles.
Consider reducing the duration to more closely align with liability shift dates
Budget, Plan and Education
Internal awareness
Engage your partners – Lengthy timeline – months. Reach out to Visa/MC but only with a real commitment to move forward.
Budget, plan and educate -
Create internal awareness and engage your partners

16. EMV Return on Investment?
Expense
Current State
Future EMV State
Fraud Cost
3BPs*
8BPs**
An EMV chip card is only authenticated in a card present transaction. Chip cards do not offer security benefits for CNP transactions.
Program Implementation Cost
N/A
One time fee from all vendor and partner engagements
Visa and MC fees est. $1000 per BIN
Cardholder education, internal training
Per Card Cost
<$1.00
Est. $3.00 for contact, single application card
Incremental Transaction Authentication Fee
$ $.009 per transaction
Device Upgrades
POS
ATM
$30-$300 depending on device type
$2000-$5000 (Fiserv solution requires ATMs utilize a Windows 7 OS)
Instant Issuance Equipment Upgrade Cost
Varies per supplier
As high as $25,000 per branch location
But what is the return on investment for EMV deployment? Is there an ROI? Will counterfeit migrate en masse to the US whereby a measurable ROI can be demonstrated with the transition to Chip?
Let’s took a look at some rough estimated numbers on the cost to deploy EMV.
[walk through table]
*Fiserv Risk Office client best-in-class average
** Federal Reserve Board published card fraud average

17. EMV Deployment Timeline
2014
Accel Network Announcements
2Q14-4Q14*
UAID Proliferation
Multi-AID Deployment in Market
3Q14-4Q15 (and beyond)*
FI and Merchant EMV Deployments
October 15
Initial Network POS Liability Shift Commences
* Timelines estimates based on forecasted market readiness

18. The Fiserv Solution
Offer a streamlined, compliant, and cost effective path to EMV debit card issuance
Align EMV solution with the front of card brand (Visa and MasterCard) while driving value and growth of Accel PIN and No PIN transactions
Integrated and standardized card personalization with Fiserv Output Solutions
Best Practice authorization processing to mitigate transaction risk
A transitional approach to EMV card issuance
Assist in internal and cardholder awareness and education

19. Recommended Issuer Guidelines
EMV Options
Visa
MasterCard
Fiserv Solution
Card Interface
Issuer choice
Dual-interface or contact chip card with companion contactless mobile application
Dual-interface recommended for best cardholder experience
Contact Only
Card Authentication
Online
DDA/CDA if offline is supported (issuer choice)
Online Only
Transaction
Authorization
Offline if issuer opts to support
Cardholder Verification
Signature, online PIN (debit), no CVM
Signature, online PIN, offline PIN, no CVM
Credit Card: Signature preferred
Debit: Issuer Choice
Source Smart Card Alliance:
Card Payments Roadmap in the United States: How Will EMV Impact the Future Payments Infrastructure? 1/23/2014

20. Fiserv Solution ATM EMV Enablement
ATM Vendor
ATM Operating System
ATM Application Software
EMV Supported
MasterCard (MChip)
Visa (VSDC)
Universal Application Identifier (UAID)
American Express (AEIPS)
Discover/ Diners (DPAS)
Other
(US Regional Networks Non UAID)
Diebold
Windows 7
Agilis 3.0
Yes
TBD No
NCR
APTRA Edge 5.0 SMI
NCR*
APTRA Advance 4.01
Nautilus Hyosung*
MoniPlus2s
Nautilus Hyosung (retail)*
Windows CE
Nautilus Hyosung Triton Native
Wincor-Nixdorf*
ProCash Flex 3
GRG*
YDC 3.1.3
Triton (retail)*
Triton Native
EMV is not supported on ATMs using Windows XP or OS2 operating systems.
* Dates for EMV enablement support to be determined for 2015 or 2016 delivery

21. EMV Answering the Top Fiserv Readiness Questions
Are Fiserv EMV solutions ready?
Yes. Fiserv payment systems and personalization capabilities have been enhanced and readied for EMV issuance and acceptance. However, general availability of a standardized solution requires pilot issuers and terminal owners to certify the standard solutions with Visa and MasterCard for all card program types and terminal deployments. These certifications are in process or need to commence.
What is the timeline to implement EMV solutions?
As EMV deployments in the US Market are still in their infancy, early adopter implementation timelines are expected to take at least 6 months.
Can cards be issued and can terminals accept the UAID?
The proliferation in market of the UAID is still a work in progress. The business agreements to accept this EMV solution took nearly 2 years to materialize. The specifications and standards that define the UAID implementation have been developed by the EMV Migration Forum but there is still work to do by all payment players including ATM and POS software vendors, card manufacturers etc. to enable the technology to support these defined standards.
Can I submit projects to get in the queue?
Yes. Although pilot and certification activities are still in process, projects can be submitted so that initial milestones both at Fiserv and at your bank can commence.

22. Additional Resources and Next Steps
Fiserv EMV Website:
Contact your Fiserv Card Services or Fiserv Output Solution Account Executive

23. Thank you