1. EMV: transforming the payment experience
William Tran, Marketing Manager, Secure Transactions with Gemalto
Lori Breitzke, North America Marketing, VeriFone

2. When is it coming to the U.S.? How will EMV change the POS?
Today’s agenda
What is EMV?
Why EMV?
When is it coming to the U.S.?
How will EMV change the POS?
B&M
Online
Mobile capabilities
Transaction & Process changes due to EMV
Questions & Answers

3. Gemalto

4. What is EMV?

5. What is EMV? Global standard for chip card and mobile payments
Developed by Europay, MasterCard and Visa in 1993
Typically a chip inset within a plastic card
Much more secure than magnetic stripe cards
CONTACT
OUTSIDE
EMV chip cards use an embedded microprocessor for payment transactions
INSIDE
Secure chip stores payment information
Chip card authentication prevents counterfeiting
Adds cardholder verification methods
Offers online or offline authorization

6. EMV is the Gateway to Digital Payments
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7. EMV Contact & Contactless Cards
Mag-stripe on the back
Contactless
Antenna inside
EMV chip

8. The Payment Ecosystem is Rapidly Evolving

9. EMV Enables Contact, Contactless and Mobile
EMV contact – card is placed into a device that reads the data on the chip
Enter individual PIN code. The card checks the PIN stored on the card.
Sometimes PIN is omitted and a signature is required.
Contact Payment Terminal
EMV contactless payments – simply tap the card and pay securely
NFC mobile payments – provides secure mobile payments, increased loyalty and marketing options for issuers
NFC-enabled phone
2 inches
Contactless Payment Terminal
Contactless Payment Terminal

10. How it Works
Online and offline authentication validates that the card is authentic
Uses cryptography and the chip’s microprocessor
Protects payment system against counterfeit cards
Can take place online, offline, or both
Online and offline transaction authorization
Authorization provides approval for the transaction based on issuer parameters
Online authorization includes transaction-specific cryptogram
Offline authorization is completed by EMV card and payment terminal
EMV can require online authorization for every transaction
EMV supports four methods for verifying the Cardholder
Online PIN
Offline PIN
Signature
No CVM
Source: EMVCo

11. Why EMV?

12. EMV Reduces Fraud
2008 – 2010: Canada noticed increased peaks of fraud due to holiday season
2011: No spike in fraud due to holiday season
As EMV penetration at POS increased, counterfeit as well as other types of fraud decreased
** % face to face EMV penetration
Source: MasterCard Analysis 2012

13. Annual Fraud Losses on UK-Issued Cards
(Pounds MM)
** % face to face EMV penetration
EMV is introduced
Source:
Source: MasterCard Analysis 2012

14. EMV Provides Global Interoperability
AFRICA, THE MIDDLE EAST 17.6% of cards 60.7% of terminals
ASIA PACIFIC % of cards 43.0% of terminals
CANADA, LATIN AMERICA, CARRIBBEAN 31.2% of cards 76.5% of terminals
EUROPE ZONE % of cards 89.0% of terminals
EUROPE ZONE % of cards % of terminals
UNITED STATES
Source: EMVCo

15. When is emv coming to the u.s.?

16. 687 Days: U.S. EMV Migration Milestones
Dates
Apr
Oct
Oct
Oct
Oct
VISA
Acquirers and sub-processors must support EMV (Mandate)
US Liability Shift1
Automated Fuel Dispenser (AFD) Liability Shift1
MasterCard
Acquirers/sub-processors must support EMV
Maestro ATM liability shift1
Merchant Account Data Compromise(ADC) relief (Phase I)
US Liability Shift2
Merchant ADC Relief (Phase II)
US liability shift for ATM transactions
AFD Liability Shift2
Discover
Acquirers, sub-processors, direct connect merchants must support EMV elements
TBA
American Express
Acquirers and sub-processors must support EMV, including mobile (Mandate)
PCI DSS relief
75% of transactions occur on Amex EMV chip-based contact and contactless devices
US Liability Shift
AFD Liability Shift
1 Liability for counterfeit transaction shifts to terminal owners if they don’t accept EMV
2 Liability for counterfeit transaction shifts to party who has least-secure support

17. The Two Largest Payment Card Markets in the World are Migrating to EMV
It typically takes 5-6 years to cover the majority of the market in a given country

18. VeriFone

19. How will emv change the pos?

20. How will the payment experience change?
Mobile
Micro/Macro
Online
e-commerce
Brick & mortar
Branches In-Store

21. How will the B&M Payment experience change?
At the POS
Device will prompt consumer to “insert card”
Amount has to be entered prior to card insertion
Processing time may be longer
Industry Stakeholders
Longer certification process
Stronger payment security
For the Consumer
Consumer may be prompted for more data after the card is inserted
Card will need to be kept in the device the entire time the transaction is being processed

22. U.s. transaction view – today & future
Host Processing
Fraud/ Velocity Check
MAG-STRIPE DELIVERY
Mag-stripe Validation
Open to Buy Check
Card Swipe
Clerk Data Entry/ Amt. Other
Send to Host
Response From Host
Approval/ Decline Message
Receipt Printing
Terminal Processing
Host Processing
Cardholder Verification CVM)
Terminal Risk Management
Terminal Analysis/ Decision
EMV CONTACT
Application
Selection
Offline Data Auth.
Processing Restrictions
Card Validation
Fraud/Velocity Check
Open to Buy Check
Clerk Data Entry/ Amt. Other
Card Insert
Terminal Verification Results (TVR)
Send to Host
Response From Host
Approval/ Decline Message
Receipt Printing
Remove Card
Card Processing
Host Processing
Terminal Verification Results (TVR)
Terminal Analysis/ Decision
EMV CONTACTLESS
Card Validation
Fraud/Velocity Check
Open to Buy Check
Clerk Data Entry/ Amt. Other
Card Tap
Send to Host
Response From Host
Approval/ Decline Message
Receipt (may not be required)

23. Transaction times comparison
DIAL
Card Swipe
Pre-Dial
Clerk UI (Amount)
Connect
Transmit/Receive
Print Receipt
DIAL WITH EMV
Clerk UI/Entry of Data (Amount)
Insert Card
Dial
Connect
Transmit/Receive
Print Receipt

24. Market Solution Certification Changes
Certification Criteria
Level 1, Level 2 Certifications
Brand testing, individual tests vary by scheme
Each brand has their own specification (based on EMVCo)
Contact and Contactless testing require specialized tools
Tools updated frequently to provide necessary scheme simulation
Results of New Criteria
Certification will take more time to accomplish at the acquirer levels
Ongoing certification work must be maintained for solutions
Ongoing investment is required to keep up to date on tools and certification process
Specialized training will be required to accomplish this new solutions delivery

25. Field Upgrades, How EMV is Different
Today
Devices are deployed, and in some cases, not touched for years
Merchants are reluctant to be reprogrammed, to give time for the activity
Infrastructure (dial lines, ..etc) not setup to handle large downloads
Tomorrow, EMV Challenges (Contact and Contactless)
EMV components, kernels for contact and contactless can and will change
New cards issued with new functionalities happen, require downloads to accept the card
Interoperability will be impacted if devices are not kept up to speed
Contactless software components, EMV and for NFC initiatives, will require updates and changes to remain field-ready for new cards

26. Merchant Decisions for the U.S.
Stand Alone Devices
Customer total amount verification, EMV card insertion, and Contactless tap
Speed of transaction
Hand over, external pin pad (with Contact/Contactless/Mag-stripe Delivery support)
Integrated
Customer facing, Communication options, USB, RS-232, IP
Register software changes to drive the device differently (Amount first, no walk up and swipe)
Semi-Integrated
Light cash register integration
Direct to host for processing, removing register knowledge of EMV or transaction data

27. VeriFone Solutions

28. EMV CAPABLE DEVICES – VX & VX EVOLUTION SOLUTIONS
Countertop
series
Vx 570
VX 520
Portable
series
Vx 610
Vx 670
VX 520
VX 680
Consumer Facing
series
Vx 810
VX 820
VX 805

29. EMV CAPABLE DEVICES – MX SERIES SOLUTIONS
Consumer Facing
series
MX 850
MX 860
MX 915
MX 870
MX 880
MX 925

30. More information
To learn more about EMV and VeriFone’s hardware, software, training and support solutions that can smooth the EMV migration process, please go to and

31. Thank you