2008 10 22 Baypay Emv Perspectives Reviewed

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  A different view of EMV opportunitiesState-of-the-art of multiapplication cards in the world
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  • 1. EMV (Chip & PIN) perspectives October, 22nd 2008
  • 2. Chip capabilities A Chip is a Computer => able to offer various functionalities Security (card-present and card-not-present environments) Card authentication (digital signature, digital certificate) ⇒ Mitigate risks of counterfeiting card (through a data breach) and phishing (secure remote authentication for e-commerce & e-banking) Cardholder authentication (off-line PIN) => Mitigate risks of fraud due to stolen/lost and not-received card Value added application(s) can be added onto a chip card e-purse (low value payment), e-ticket/e-fare (transit), e-coupon (loyalty program) Cash easy-to-use and convenient Credit card Card-present transaction Numeric signature and secrets Encrypted PIN Bus fare Card-not-present transaction Digital certificate and secrets for Coupon ($) secure remote authentication Retailer loyalty program 2 Nathalie Caye - nathalie.caye@e-excellence-inc.com - © e-excellence inc. 2008
  • 3. What kind of perspectives can we except with the chip & PIN card ? Offer new products and/or services Context: Economic situation New cards with value-added services (multi-function Fraud issues cards), self-service devices, PIN change service, etc. Consumers needs New consumer habits Develop the acceptance network PIN off-line functionality (debit and prepaid cards), new channels of payment, partnerships Reduce costs Fraud, operational and processing costs Interchange Provide a better customer service Network(s) Processor Convenience, time savings Acquirer Issuer Enhance your public image Innovation & Security ATM Processor Terminal Profitable for all stakeholders Debit/Credit/ Prepaid cards Merchant Cardholder 3 Nathalie Caye - nathalie.caye@e-excellence-inc.com - © e-excellence inc. 2008
  • 4. Demo: chip and PIN card transaction in a restaurant WELCOME Chip & PIN card ENTER AMOUNT Cardholder Merchant 16.08 $ Ok? WAITING FOR CARD INSERT OR SWIPE Check card digital signature PROCESSING (Static or dynamic card authentication) DO NOT REMOVE CARD Terminal ADD TIPS ? YES -> NO -> AMOUNT -> % -> 2.00 $ 4 Nathalie Caye - nathalie.caye@e-excellence-inc.com - © e-excellence inc. 2008
  • 5. Demo: chip and PIN card transaction in a restaurant ENTER PIN PRESS OK Chip & PIN card Cardholder Merchant **** Process online/offline authorization Check PIN (Cardholder authentication) DO NOT REMOVE CARD (eventually dynamic card Generate a dynamic digital GIVE TERMINAL TO CLERK authentication) certification Store the transaction into the chip application APPROVED Print cardholder and merchant REMOVE CARD receipts Terminal 5 Nathalie Caye - nathalie.caye@e-excellence-inc.com - © e-excellence inc. 2008
  • 6. Trends in terms of value added chip cards Canada Russia Low-value payment Kiok Travel ticket Welfare services Offline PIN Debit card vending machine Wireless terminals Asia Pacific e-coupon (Instant reward) e-purse Mexico – Brazil Europe e-fare (transport) Offline PIN Credit card e-fare (transport) e-ID Transport (unbanked Low-value payment population in Brazil) Secure Remote authentication Prepaid card Offline PIN Debit card Combination of a Debit and a Credit application on the same chip card Payment markets implementing Value added chip application depends on: only chip payment card Culture of payment First adopters: mature payment market Maturity of payment market implementing value added services card Level of confidence in forms of payment 6 Nathalie Caye - nathalie.caye@e-excellence-inc.com - © e-excellence inc. 2008
  • 7. Conclusion: short-term, mid-term and long term short-term, mid- perspectives Issuer Cardholder Merchant Acquirer/Processor ATM/ABM /ISO Processor Fraud mitigation (C, Fast check-out Fast check-out, time saving Cost reduction PIN Change services PIN S/L, MNR) Convenient and Convenient and easy-to- New range of (new revenues) (off-line New card products easy-to-use (same use (same process for all chip terminals offering Value-added auth) offering a larger process for all chip cards) (Wireless, self-service services at the ATM: acceptance network (off- cards) New card acceptance devices, etc.) e-fare reloading (new line PIN Debit card, Larger acceptance (offline PIN Debit card, New merchants revenues) Prepaid card ) network Prepaid card) ; Could encourage higher spending New services (self-service Short - devices with higher floor term limit) Less paper (till rolls) Contact/Contactless Replace cash for low New card acceptance Increase revenues New card card (increase revenues value payment (could encourage higher (number of products by replacing cash) Secure e-banking, e- spending) transactions) Secure remote commerce (protection authentication (e- against phishing ) banking, e-commerce) Differentiation Increase revenues Larger acceptance Wireless terminal New merchants New (number of transactions) network and services (convenience) Increase revenues terminal long -term Mid and Self-service devices for high (number of devices amount purchase (kioks), for transaction) items rental (DVD, bicycles, trolleys, etc.) Convergence and New services : Loyalty and reward Cost reduction Application Misc. Nathalie Caye (transport, Partnership - nathalie.caye@e-excellence-inc.com -program transport, loyalty and (private network) downloading service © e-excellence inc. 7 retailers) reward program Loyalty and reward Partnerships 2008 Mitigation of a part of (instant reward) program for fraud due to data merchants breaches
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