©2012 MasterCard. Proprietary.
2012 Investment Community Meeting
EMV: The Next Generation of Payments
September 20, 2012
Carolyn Balfany
Group Head, Product Delivery
Investment Community Meeting ©2012 MasterCard. Proprietary.
MasterCard EMV Video
September 20, 2012 Page 2
Investment Community Meeting ©2012 MasterCard. Proprietary.
EMV Chip Transaction Flow
Card
Authentication Cardholder offers
card to reader
Cardholder
Verification Cardholder enters
PIN or signature
Transaction
Authorization Transaction is approved,
card is removed
Page 3 September 20, 2012
Investment Community Meeting ©2012 MasterCard. Proprietary.
Magnetic Stripe vs. Chip
Page 4 September 20, 2012
• Fixed content
• Passive
• Limited data
• One size fits all
• Flexible content
• Active
• High capacity
• Tailored to your needs
Investment Community Meeting ©2012 MasterCard. Proprietary.
No preparation for migration One or more banks migrating or have
completed migration to EMV chip
Penetration of MasterCard-branded EMV cards,
EMV POS or EMV ATMs exceeds 50%
Canada
• 95% of cards
• 70% of POS
• 50%+ of ATMs EMV chip-enabled
Europe
• 70%+ of cards EMV chip-enabled
• 90% of ATMs and POS EMV chip-enabled
Asia-Pacific
• 25% penetration of cards, 50% of POS devices
Latin America / Caribbean
• 80%+ of acceptance now EMV chip-enabled
• Brazil, Mexico, Venezuela, Colombia most advanced
Middle East & Africa
• 12 markets > 40% EMV infrastructure penetration
• 10 markets > 80% ATM penetration
EMV is a Proven, Scalable Technology
Page 5 September 20, 2012
Source: Internal data and estimates as of 2Q 2012
Investment Community Meeting ©2012 MasterCard. Proprietary.
Today’s environment is
far advanced from when
EMV was implemented
in much of the world
Large-scale global
deployment has greatly
lowered the cost for U.S.
issuers
24/7 connectivity, mobile
lifestyles, and
smartphones fuel
consumer demand
With 1.5 billion chip
devices in 130 countries,
EMV is a proven,
future-proof platform
Benefits of EMV Chip for U.S. Payments Ecosystem
Page 6 September 20, 2012
No preparation for migration One or more banks migrating or have
completed migration to EMV chip
Penetration of MasterCard-branded EMV
cards, EMV POS or EMV ATMs exceeds 50%
Source: Estimates from MA customers, internal data and estimates
Investment Community Meeting ©2012 MasterCard. Proprietary.
Five Key Elements of MasterCard Approach
Page 7 September 20, 2012
Liability Hierarchy
Aligning Transaction Rules
Account Data Compromise Protection
Secure All Channels
Industry Coordination
http://www.mastercard.us/mchip-emv.html
Investment Community Meeting ©2012 MasterCard. Proprietary.
MasterCard U.S. Roadmap
Page 8 September 20, 2012
October 2012 PCI audit relief
takes effect
October 2015 MasterCard ADC relief takes
effect (100%)
MasterCard liability hierarchies
take effect (excluding fuel)
April 2013 Acquires and sub-processor
mandate to fully process
EMV transactions
Cross-border Maestro ATM
liability shift to non-EMV ATMs
October 2013 MasterCard Account
Data Compromise relief
takes effect (50%)
October 2017 MasterCard liability
hierarchy takes
effect for automated
fuel dispensers
October 2016 MasterCard liability
hierarchy takes
effect for all U.S.
ATM transactions
Investment Community Meeting ©2012 MasterCard. Proprietary.
Government
ACCOUNT
HOLDERS
Tailored Offers and Coupons
Convenience and Savings
Integrated Payment
Experience and Benefits
Enhanced Security
Universal Acceptance
Processor
Benefits of EMV Chip for U.S. Payments Ecosystem
Page 9 September 20, 2012
Merchant Acquirer
Issuer
Investment Community Meeting ©2012 MasterCard. Proprietary.
MasterCard Innovation with M/Chip
Page 10
Transit On card data for high speed
transit payment
Mobile EMV strength payments using NFC & secure element
Multi-Account Consumer choice of debit, credit, or prepaid on one card
Display Card On card one-time secure codes and issuer information display
Authentication Highly secure SecureCode /
remote banking
PayPass™
Fast, secure Tap & Go™ contactless payments
Benefit Cards Discounts and other entitlements
integrated with payment
M/ChipTM
September 20, 2012