chip and pin - · pdf file1 innovation, efficiency, simplicity. table of contents 1. what is...

Innovation, Efficiency, Simplicity. | 2015 Commercial Cards Conference | May 18 - 20, 2015

Presented by:

Seth Goodman, North America Commercial Cards Product Management Head

Marzena Maloszycka, North America Commercial Cards Travel Product Manager

Mark Kozicki, Canada Commercial Cards Product Manager

Chip and PIN

Treasury and Trade Solutions | Citi Commercial Cards

1

Innovation, Efficiency, Simplicity.

Table of Contents

1. What is a Chip and PIN card?

2. Citi Chip and PIN migration

3. Global availability

4. Chip and PIN usability demo

2


Card innovation has been slow

How did the Credit Card Security Evolve?

1920 Signing 1966 Magnetic

Stripe 2003 EMV -

Chip and PIN

3


What is Chip Card Technology?

EMV chip or “smart” cards are credit, debit or prepaid cards

that have an embedded microchip

Microchip generates a dynamic one-time use token

(a cryptogram)

Prevents the data being reused to create counterfeit cards

Requires a Personal Identification Number, or PIN, instead of

a signature to verify the transaction

Chip Cards Improve Card Security by Using a Dynamic One-time Use Token

Source: Visa.

4


Chip Migration Milestones

April 2013 October 2015 October 2016 October 2017

US acquirers and

sub-processer

mandate to fully

process EMV

transactions

Liability Shift for

most merchants

70% of credit cards

will be EMV enabled

by end of 20151

MasterCard—

Liability Shift for

ATM owners,

domestic cards

Visa—Liability Shift

for ATM owners,

domestic cards

Liability Shift for

automated fuel

dispensers

1. Aite; 2. MasterCard

70% 90% 98%

Multiple Stakeholders are Involved in the Migration to Chip Technology

Forecasted U.S. Chip Terminal Penetration2

5


Chip and PIN Chip and Sig

Pros

• Protects against lost and

stolen

• Most consistent cardholder

experience in EMV PIN

preferring countries

• Greater international

acceptance

• Higher cardholder

confidence in card

acceptance abroad

• Consistent cardholder

experience at attended

point of sale devices

• Similar to mag stripe

transaction experience

• More secure than a mag

stripe card

• Don’t have to set and

remember the PIN

Cons

• Challenging to educate and

communicate to cardholders

• Cardholders may have

trouble remembering PIN

• Does not protect against

lost and stolen

• Cardholder confusion may

be created by the

expectation that a PIN is

needed but they are not

prompted for it at the

terminal

Chip and PIN vs. Chip and Signature

60% of Commercial Cards Issuers, Including Citi, are Implementing Chip and PIN vs.

Chip and Signature

Source: Krebs

• Chip and PIN cards account for about

82% of EMV cards worldwide (ex-

U.S.)

• It is expected that Chip and PIN will

become the global standard

• U.S. is the last of the G20 nations to

move to Chip-based cards

• Chip and PIN vs. Chip and Sig in

U.S.:

─ almost 100% of consumer credit

cards issuers chose Chip and

Signature

─ 60% of commercial cards issuers

chose Chip and PIN vs. Chip and

Signature

6


Why is Citi Migrating to Chip and PIN?

Did we Convince You? If not, Maybe President Obama will …

On October 14, 2014 President Obama

Signed an Executive Order to Adopt

Chip and PIN Technology for

Government Payment Cards

“I want to encourage every retailer, every bank, and every credit card company

to join in this effort (Chip and PIN migration).”

—President, Barack Obama

7


Citi Chip and PIN—US Migration

Citi will Replace US Magnetic Strip Cards with Chip and PIN Cards by October 1, 2015

Reissuance Strategy

“Natural Reissue”

– All new account requests, replacement cards and accounts up for reissue with expiration

date between February 2015 and October 2015

“Forced Reissue”

– Issue Chip and PIN cards by client and program type, for any account that has been used

within the last 18 months and where expiry date is October 2015 or beyond

8


Card can be activated by going to the URL or by calling the toll-free number listed on the

activation sticker located on the new Chip and PIN card

During the card activation process, cardholders must select a 4-digit PIN

It is critical that cardholders follow the prompts and not leave this process incomplete

PINs are highly secure and Customer Service cannot see the cardholder PIN nor can

they input the PIN for a cardholder

─ To select a PIN go to the URL listed or Integrated

Voice Response (IVR) system

─ To change or reset a PIN go to the IVR

─ If cash access is allowed, use the same PIN

Cardholder Activation and PIN selection Required

Cards Can be Activated Online Or by Calling IVR

9


There is a small cardholder population that during the activation hanged up the

phone or closed the browser before setting a PIN

In a couple months, Citi will be sending reminders, via email or voice call, to the

cardholders who activated their card but have not selected a PIN

Setting PIN Reminder

It is very Important that a Cardholder Sets a PIN!

10


Chip and PIN Communication

Citi is Committed to Provide Comprehensive Communication to the PAs and the

Cardholders

PA Communication

PA Communication Letter

Deactivation FAQs

Chip and PIN FAQs

Deactivation Communication

– 60, 30, and 15 day

deactivation communication

via email and voice call

– Deactivation FAQs

Cardholder Communication

Chip and PIN Use

– Card Carrier

– Chip and PIN FAQs

– Video – in progress

11


Citi Chip and PIN Migration—Mag Cards Deactivation Strategy

Cardholders Need to Activate their Card and Set a PIN

60-day

Cardholder

Communication

30-day

Cardholder

Communication

15-day

Cardholder

Communication

0-day

Card Deactivated

All Cardholders, regardless of when they received their Chip and PIN card, on an ongoing basis will have at least 60 days from

card issuance until the old card is deactivated

– For Cardholders who received their cards between Jan and May, the 60-day communication period will start May 26th

– All new cards issued in May and onward, will receive a 60-day notice at the time of card issuance

Cardholders will receive three reminders via email or voice call prior to the deactivation, which will remind them to activate the

Chip and PIN card before their magnetic strip card is deactivated

Reminder Schedule

– First Reminder—60 days before the deactivation

– Second Reminder—30 days before the deactivation

– Third Reminder—15 days before the deactivation

Card Deactivated—at least 60 days from card issuance

Sample of a Reminder Timeline

Chip and PIN in Canada

13


Cards in circulation

EMV cards

Contactless EMV

cards

100MM

95%

25%

Canada’s EMV Environment Today

Sources: Card Technology Choices for US Issuers – An EMV Whitepaper, American Banknote Corp. 2013,

EMV: Lessons Learned and the US Outlook, Aite Group Inc 2014

14


Key Lessons for Your Card Program

Don’t Underestimate Your Cardholder Education Challenge

– The move to EMV, regardless of country technology and launch differences, will require

changes in how your cardholders experience their cards

– Early and repetitive education to cardholders is the key to reducing negative use

experiences and calls to you for assistance and support

Expect Bumps in the Merchant Road

– Even with a flawless Issuer and company rollout of cards,

cardholders may still encounter merchant situations requiring calls

to you for assistance and support

– Insure the ‘merchant experience’ is included in cardholder education

– Question key suppliers on their EMV strategy and migration plans

to anticipate ‘experience choke points’

Consider Alternate Migration Paths for Fraud

– EMV and Fraud: mitigates not eliminates

– Introducing EMV does not eliminate the need for PA and cardholder vigilance

– Reviewing spending habits, managing restrictions and policies around CNP, insuring

efficient and regular statement reviews, especially after EMV launch, will be key to

mitigating fraud and maintaining card program productivity

15


Chip and PIN—Availability

Chip and PIN is Available in all of Citi’s Presence Countries in EMEA,

and is being Implemented Throughout NAM

EMEA

All presence countries for EMEA have

been fully migrated to Chip and PIN

North America

Currently migrating entire portfolio

throughout US and Canada

Latin America

Chip and PIN: Brazil

Chip and Signature: Puerto Rico,

Argentina, Colombia, Mexico, Costa Rica,

El Salvador, Guatemala, Panama

Magnetic Stripe Only: Peru

Asia

Chip and PIN: Australia,

New Zealand, India

Chip and Signature: Hong Kong,

Singapore, Indonesia, Malaysia,

Thailand, Philippines

Magnetic Stripe Only: Taiwan

16


First Chip and PIN transaction

Subsequent Chip and PIN

transaction

PIN changes

Demo

Chip and PIN Card Usability

17


Questions?

Innovation, Efficiency, Simplicity. | 2015 Commercial Cards Conference | May 18 - 20, 2015

IR S C irc u la r 2 3 0 D is c lo s u re : C it ig ro u p In c . a n d its a f f i lia te s d o n o t p ro v id e ta x o r le g a l a d v ic e . A n y d is c u s s io n o f ta x m a tte rs in th e s e m a te r ia ls (i) is n o t in te n d e d o r w r it te n to b e u s e d , a n d c a n n o t b e u s e d o r

re l ie d u p o n , b y y o u fo r th e p u r p o s e o f a v o id in g a n y ta x p e n a lt ie s a n d ( ii) m a y h a v e b e e n w r itte n in c o n n e c t io n w ith th e " p ro m o tio n o r m a rk e tin g " o f a n y tra n s a c tio n c o n te m p la te d h e re b y (" T ra n s a c tio n " ) .

A c c o rd in g ly , y o u s h o u ld s e e k a d v ic e b a s e d o n y o u r p a r tic u la r c irc u m s ta n c e s fro m a n in d e p e n d e n t ta x a d v is o r .

A n y te rm s s e t fo r th h e re in a re in te n d e d fo r d is c u s s io n p u rp o s e s o n ly a n d a re s u b je c t to th e fin a l te rm s a s s e t fo r th in s e p a ra te d e fin it iv e w rit te n a g re e m e n ts . T h is p re s e n ta tio n is n o t a c o m m itm e n t o r firm o f fe r a n d d o e s n o t

o b lig a te u s to e n te r in to s u c h a c o m m itm e n t , n o r a re w e a c tin g a s a fid u c ia r y to yo u . B y a c c e p tin g th is p re s e n ta tio n , s u b je c t to a p p lic a b le la w o r re g u la tio n , yo u a g re e to k e e p c o n fid e n tia l th e in fo rm a tio n c o n ta in e d h e re in a n d

th e e x is te n c e o f a n d p ro p o s e d te rm s fo r a n y T ra n s a c tio n .

W e a re re q u ire d to o b ta in , v e r ify a n d re c o rd c e r ta in in fo rm a tio n th a t id e n tif ie s e a c h e n ti ty th a t e n te rs in to a fo rm a l b u s in e s s re la tio n s h ip w ith u s . W e w ill a s k fo r yo u r c o m p le te n a m e , s t re e t a d d re s s , a n d ta x p a ye r ID n u m b e r .

W e m a y a ls o re q u e s t c o rp o ra te fo rm a tio n d o c u m e n ts , o r o th e r fo rm s o f id e n tif ic a tio n , to v e r ify in fo rm a tio n p ro v id e d .

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chip and pin - · pdf file1 innovation, efficiency, simplicity. table of contents 1. what is...

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