case study on chip and pin implementation in us

A Case Study in EMV Mobile ServicingPilot for Target Prepaid REDcard from American Express®

Introduction

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Bodhi ChoudhuriVP of Engineering American Express Technologies

Patrick DostalDirector of Product Development American Express

What is REDcard?

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Target’s loyalty card program that gives cardholders 5% off online and at point of sale, free shipping, and extended returns.

Problem Statement

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Credit and Debit REDcard required prospects to be bankable and had limited spend control features.

• Debit REDcard• Requires a bank account to connect.

• Credit REDcard• Requires a credit check.

• Unbanked, under-banked and customers who did not want another credit/debit product could/did not get access.

The Solution

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Run a limited pilot to explore rounding out the mix with an accessible card account with a rich feature set.

• Target Prepaid REDcard from American Express®

• No credit check• No bank account required• Spend control features

• POS cash loading• Reserve Account• Mobile servicing

Mobile Servicing with Prepaid REDcard

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Prepaid requires servicing on-the-go. The fully responsive site enables all servicing capabilities.

• Mobile Servicing Features• Check balance• See transactions• Load card account

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The Breach Situation

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In 2013 Target suffered a large breach that changed the processing landscape for Target and REDcard.

• Target Breach Fallout• Target’s CFO testified in a Senate

hearing that Target will “begin to issue chip-enabled Target REDcards and accept all chip-enabled cards by early 2015.”1

1. https://corporate.target.com/_media/TargetCorp/global/PDF/Target-SJC-032614.pdf

EMV Requirements

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Prepaid REDcard would be required to align with the EMV requirements of the rest of the REDcard portfolio.

• EMV Enabled Card• Must be EMV-enabled

• PIN-preferring Card• Must meet PIN preferring

requirements for Target POS• PIN Servicing Requirements

• Must allow customer PIN selection and PIN servicing

The EMV Solution

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Launch chip and PIN enabled version of the Prepaid REDcard® with all PIN servicing features of REDcard.

• EMV Enabled Card• Must be EMV-enabled

• PIN-preferring Card• Enabled with chip and offline PIN

• PIN Servicing Requirements• Self-select PIN• View PIN• Change PIN

Mobile Servicing with Chip/PIN Prepaid REDcard

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Chip and offline PIN introduces servicing complexities that we solved for through mobile servicing.

• EMV Mobile Servicing Features• Check balance• See transactions• Load card account• View PIN• Change PIN

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Next Steps with Prepaid REDcard®

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We’ve been able to see success with Prepaid REDcard but are now awaiting decisions to take it national.

• Migrate existing mag-stripe customers to EMV

• Determine national roll-out