EMV Bank Card Benefits for CardHolders

Jack Jania

May 2009

CTST– May 2009 2

Agenda

EMV migration in the world

EMV Use CasesWhy issuers deploy dual-interface EMV payment cards

Card Holder Lessons

EMV migration in the world

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Issuers deploy EMV… for fraud reduction

Credit and debit card losses on UK-issued cards, 2003-2007

Source: APACS

In m£

Chip&PIN roll-out

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Payment fraud is a global concern

New EMV mass deployments in all regions (e.g. Spain, Thailand, Brazil, Canada…)

+ 41% volume growth in H1’08 vs H1’07*

+24% volume growth in 2007*

SPA Shipmentsof EMV cardsPer Quarter

(in ku)

Source: SPA (Smart Payment

Association)

* Source: SPA (Smart Payment

Association)

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EMV adoption is global

EMV deployedEMV to be deployed (est. in the next 24 months)

Source: Eurosmart, MasterCard, Gemalto No EMV

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EMV is changing merchants’ behavior

Acceptance issue: non-EMV magstripe cards not accepted anymore at somepoint of sales (e.g. unattended vending machines, car parks, tolls…)

Chip&PIN or cash required, creating convenience issue for magstripe card holders

Education issue: Merchants clerks trained to conduct EMV transactionsChip&PIN is now the standard payment means in many countries

Clerks not used to magstripe cards at some places (e.g. small shops that do not see foreigncards frequently)

Trust issue: increase of fraud of non-EMV foreign cards at EMV merchantsEMV Merchants not liable for non-EMV fraudulent transactions

BUTAcquirers increasingly transfer part of the cost (e.g. Asian acquirers now increasingly require merchants to provide a security deposit of US$25,000 to cover the fines they sustain when skimming originates within their merchant base)

Might result in low service level or deny of service for magstripe card holders

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[…]

http://www.visa-asia.com/ap/au/cardholders/tips/tips_visiting_uk.shtml

Use casesWhy issuers deploy dual-interface EMV payment cards…

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All the benefits of EMV…Fraud reduction

EMV/Chip added-value features– Support for (complex) loyalty

schemes– Local applications (e-purse, ATM…)– CAP

0

100

200

300

400

500

2004 2005 2006 2007

UK fraud

Fraud abroad

UK retailer (face-to-face transactions)UK cash machine

in m£ Credit and debit card fraud losses on UK-issued cards

UK fraud includes:

Source: APACS

Get EMV… and more

… combined with speed and convenience

For payment– With interoperability WW – Support for both online and offline

transactions (DDA/CDA)

And more:– Support for existing transport

scheme– Support for access solution

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Dual-interface adoption gets global, too

Mass deployment in 2008 Pre-deployment in 2008 At pilot/small program stage in 2008

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Barclaycard OnePulse

EMV DDA via contact

CAP for on-line authentication

… and more

Visa payWave featureWith support of fDDA (for offline merchants)

Oyster application for public transport in London

Launched Sep 10, 2007

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Garanti Bank Bonus Trink

EMV DDA via contact

… and more

MasterCard PayPass featureFast payment at retailers / 4000 acceptancepoints / 20 retailers

Bonus Trink loyalty programInstant reward loyalty scheme350,000 acceptance points / 5,000 merchantsAvailable in contact and contactlessMade possible by MPCOS tool boxHeavy back-office

e-ticketing for public transportationBased on Mifare technology

Launched October 2008

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Petronas Maybankard Visa

EMV DDA in contactGovernment mandate

treatsPoints loyalty programEarn loyalty points at partcipatingmerchants, with possibility to convertaccumated treatPoints to Petrol voucheron-chip e-coupons for instant redeem and discounts at selected merchantsMade possible by applet (contact)Light back-office

… and more

Visa payWave feature

Zing Touch&Go feature for toll

Launched Jan 30, 2008

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Bank Asya DIT

EMV DDA via contact

CAP for on-line authentication

Loyalty scheme via contactBased on MPCOS tool box

… and more

MasterCard PayPass feature for retailpayment and open-loop transit ticketing

GPRS PayPass/payWave terminals in busesDDA for offline transactions

KGS Toll payment featureAll tolls all over Turkey (>300)Incl. The 2 Bosphorus bridgesBased on Mifare technology

Launched July 2008

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Manchester City Football Club MasterCard Prepaid Season Card, by MBNA

EMV in contact

Prepaid MasterCard

Manchester City FC image

… and more

Replaces the standard season ticket currently issued to supportersProvides phyiscal access to Manchester City Stadium via the contactless interface(Mifare)

Equipped with PayPass to purchase items at bars and stands in the Stadium areas, without queuing

DDA for offline transactions

Launched March 10, 2008

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ICBC Tianjin city card

EMV DDA in contactChina Union Pay PBOC application

Poney application in contactDriver identificationUsed for payment of finesAll drivers must have an ICBC card with Poney

… and more

Contactless payment featureqPBOC application (DDA)

Mifare for public transportation

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Card Holder Lessons

US international travelers see their cards declined in someenvironments in EMV countries

Unattended merchantsSmall merchants where clerk is confusedDDA required to support off-line transactions

Card Holder adoption driver is dual-interface EMV cardsTransit and co-branding (with loyalty) drive card holder acceptance and usage

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Thank You