emv overview by dps
DESCRIPTION
"EMV® is a global standard for credit and debit payment cards based on chip card technology" taking its name from the card schemes Europay, MasterCard, and Visa that developed it. The standard covers the processing of credit and debit card payments using a card that contains a microprocessor chip at a payment terminal.TRANSCRIPT
EMV Overview PREPARED AUGUST 2012
INTRODUCING DPS | PAYMENT EXPRESS
WE EMPOWER PAYMENT TECHNOLOGY FOR YOUR ADVANTAGE
SOLUTIONS Innovative full-end-to-end cloud-based payment platform
Full Web-Based Reporting
On/Off Street Parking
Vending
POS Terminals
E-Commerce
OUR SERVICES
Core disciplines for your advantage
24/7 Support Service
Business Analysis
Project Management
Development
Quality Assurance
WE EXECUTE THE ATTITUDE AND KNOWHOW TO CONSTANTLY DELIVER GREAT RESULTS
SNAPSHOT
DPS AT A GLANCE
Established 1997
Subsidiaries in Sydney,
New York and London
Certified in 10+ regions with
multiple banks and schemes
All IP and infrastructure
owned by DPS
EVIDENCE
OUR CREDENTIALS
15,000+ merchants
Direct VISA link
Per $20b of transactions p.a
Exceeds global security
standards
Largest independent IP
Payment Gateway in
Australasia
Interwoven team
skills striving to
provide the best
solutions
Leaders in
payment
development
Product innovation.
Excellence in
deployment and
support
Openness,
enthusiasm,
and a passion
for customer
satisfaction
HOW WE
CONVERT
OUR
TECHNOLOGY
FOR YOUR
ADVANTAGE
Industry leading payment
solution provider
OUR
PEOPLE
OUR
VISION CULTURAL
FIT
EXECUTION
OUR
ESSENCE
WE UNDERSTAND
PAYMENTS TO THE FULL, AND WORK WITH A LEADING NETWORK OF PROVIDERS
SCHEME PARTNERS
VISA
MasterCard
AMEX / JCB
Diners
Discover
China Union Pay
BANKING RELATIONSHIPS
ANZ
ASB
Bank of New Zealand
Bank of South Australia
Bank West
Barclaycard
BOQ
Citigroup
Commonwealth Bank
Elavon Europe
EMS
HSBC UK
HSBC International
Kiwi Bank
National Australia Bank
Standard Bank South Africa
Standard Chartered (Asia)
St George
US Bank (Elavon)
Wells Fargo
Westpac AU / NZ
Westpac Pacific Islands
EMV is a global standard for credit and debit payment cards based on chip card technology
EMV is also known throughout the world as “Chip and PIN”, ICC, and “IC Credit”
EMVCo is the governing body maintaining EMV specifications and Approvals
EMVCo members are American Express / JCB, MasterCard, and Visa
Advanced security measures and advanced cryptography reduces exposure to fraud
Aims to establish a common foundation for global payments and acceptance
UNDERSTANDING EMV
WHAT IS EMV?
Global interoperability of services
Secure contactless payment methods – reflects current trends in technology
Allows for offline card verification and approval
Designed for the future, allowing the delivery of payments beyond traditional mag strip cards
Carries Risk Management Parameters to reduce unauthorised payment risks
Digitally signs payment date for reduction of fraudulent transactions via advanced security
Protects against counterfeit fraud through authentication of the chip card
UNDERSTANDING EMV
WHY GO EMV?
EMV - Europay, MasterCard and Visa developed standard to reduce transaction fraud
EMV Level1 - Covers physical, electrical and transport level interfaces
EMV Level2 - Covers payment application selection and transaction processing
NFC - Near Field Communication (used in smart phone / m-commerce payments)
PCI - Payment Card Industry Standards Security Council that sets payment security standards
CAT/UPT - Cardholder Activated Terminal/Unattended Payment Terminal
PCI PTS 3.x – PCI Device certification, formerly PCI PED.
No Customer Verification Method - No CVM
2 Key Triple Encryption - K1 !=K2; K1=K3 - Data Encryption Standard – 168 bit encryption
Digital Signatures - Data authentication
PCI-DSS - Payment card industry data security standard
Unattended/Attend/Semi-Attended - Levels of supervision for card readers
TERMINOLOGY
KEY WORDS
THE EMV PROCESS
UNDERSTANDING EMV
Terminal Verification Results
Application
Selection &
Reading Offline Data
Authentication Card Holder
Verification Terminal Risk
Assessment Terminal
Action Analysis
Determine the
application to use
(Visa, MasterCard)
& then reads the
data
Static Data
Authentication (same
Key), dynamic Data
Authentication (a
new key each time)
e.g. signature, PIN,
No CMV
e.g. Floor Limits
Terminal decides on
what it is going to ask
the card
TC – Offline
Approval | ARQC
– Online
Authorisation |
AAC – Offline
Decline
Card Action
Analysis
Designed to ensure the TERMINAL CHIP READER conforms to the EMV SPEC
The transfer of data between the credit card and terminal
UNDERSTANDING EMV
LEVEL 1 – L1 EMV KERNEL APPROVAL
Designed to ensure the SOFTWARE conforms to the EMV SPEC
EMV Applications i.e Payments.
Non-EMV application functions such as POS hardware. Messages to an Acquirer
host are not viewed as a KERNEL function
LEVEL 2 – L2 EMV KERNAL APPROVAL
Terminal Application
EMV Kernel
High Level API
Lower Level API
Terminal Hardware
EMV Certifiable
Certifying Device; Software, Gateway & Switch with Merchant’s Acquirer and
Schemes e.g. Visa ADVT and MasterCard MTIP certifications
LEVEL 3 – END TO END APPROVAL
EMV AT WORK
CARDHOLDER / ATTENDED BY MERCHANT EXPERIENCE
Step 1 – Swipe card
Service Code = 2xx
“2” = Chip Present
“Please insert the Chip
Card”
EMV AT WORK
CARDHOLDER / UNATTENDED EXPERIENCE
Step 2
Leave in reader but retain
possession of the card until
prompted to remove after
transaction completed
Step One
Insert into dual Chip &
Track2 magstripe [non
motorised] reader
EMV AT WORK
OFFLINE VS. ONLINE PIN
Online PIN is in the Issuer’s Host
Offline PIN is in the Chip
Issuer Host
Self selection of PIN to cardholders should typically be offered by issuers
A secure process for PIN change and PIN unblock will be necessary (if PIN is forgotten)
Synchronisation must occur when the online or offline PIN is changed
WHERE IN THE WORLD IS EMV?
Europe • More than 70% of cards
are EMV
• 90% of ATMs/POS are EMV
Canada
• 66% of cards
• 75% POS
• More than 40% of ATMs
EMV enabled
Latin America • More than 80% of
acceptance now EMV
enabled
• Most prominent in Brazil,
Mexico, Peru, Venezuela
and Colombia
Asia Pacific • 30% penetration of cards
and over 50% of POS
services
• ATM migration growing
over 200% year on year
Middle East & Africa • 7 markets at over 40% EMV
infrastructure penetration
• 10 markets at over 80% ATM
penetration
• EMV year on year growth of
36% cards, 25% POS and 39%
ATM’s
Data sourced from MasterCard, May 2012
WHERE IN THE WORLD IS EMV?
GLOBAL EMV STATISTICS PART A
Figures sourced from American Express, JCB, MasterCard and Visa. As reported by their member financial institutions globally
Region EMV CARDS Adoption Rate EMV Terminals Adoption Rate
Canada, Latin
America and the
Caribbean
182,185,043 26.4% 2,000,000 55.6%
Asia Pacific 305,126,927 26.6% 3,200,000 41.6%
Africa & the Middle
East
16,841,874 13.7% 348,000 62.5%
Europe Zone 1 555,688,434 65.4% 9,400,000 84.7%
Europe Zone 2 22,817,271 11.5% 457,800 61.2%
Total 1,082,659,549 36% 15,405,800 65%
WHERE IN THE WORLD IS EMV?
EMV MasterCard-branded cards (35% of all MasterCard cards)
EMV POS terminals that accept MasterCard-branded EMV cards (62% of all POS terminals accepting MasterCard)
New MasterCard-branded EMV cards each year
Global EMV-Compliant cards
Global EMV-compliant POS Terminals
Global EMV penetration (75% excl. US)
Global EMV POS terminal growth rate (mid 2010-mid 2011)
EMV-compliant ATM terminals that accept MasterCard-branded EMV cards (39% of all MasterCard ATM terminals)
MasterCard Chip Migration Services delivered globally
Customer banks supported on EMV Chip deployment to date
Countries in which EMV is being rolled out for MasterCard products
Global EMV Card growth rate (mid 2010-mid 2011)
Sourced from MasterCard customers, regional offices and QMR May 2012
1 Billion+
18 Million
+60%
+18%
+32%
633 Million+
20 Million+
740,000+
100 Million+
3,000+
1,700+
130+
GLOBAL EMV STATISTICS PART B
US LIABILITY SHIFT
UNDERSTANDING THE SHIFT
Liability shift for domestic and cross-border counterfeit card-
present point-of-sale (POS) transactions
A card-present counterfeit fraudulent chip enabled card transaction is
performed on a Non-EMV POS device the liability shifts to the merchant
If performed on a EMV approved device then the liability shifts to the
issuer / acquirer
Merchant needs to discuss with their Acquirer how this liability shift
applies to them
HOW WILL IT AFFECT THE PARKING INDUSTRY?
KEY IMPACTS
EMV incorporates advanced encryption algorithms, increasing security
and reducing fraud
Will help decrease losses from card-related fraud by enabling
cardholder verification methods, which can offset CAPEX investment
With the implementation of “contactless”, payment and exit times are
accelerated which can combat longer EMV processing times
Adapting point of sale systems to accommodate new cardholder
experience
Facilitates the introduction of new payment technologies e.g. NFC,
Contactless, m-commerce.
Card Acquirer / Issuer
Confirm Liability
Parameters
Upgrade & Maintain
Systems to support
manage EMV data
THE EMV FOOD CHAIN
EMV
STAKEHOLDERS
Merchant Acceptor
Invest in EMV technology
upgrades
Comprehend what EMV /
PCI obligations it has as a
merchant
Look to establish working
groups
Training of staff
Vendor Supplier
Integrate certified EMV
hardware and/or software
technology
Integrate technology to best
practices
Manage relationships with
EMV equipment suppliers &
payment processors
Payment Processor Gateway
Assist Merchants and Acquirers
Facilitate merchant transactions
Be an interface provider
between merchants’ systems’
and the acquirer / issuer
Stay EMV & PCI compliant
STRATEGIES FOR PARKING AUTHORITIES
Develop a EMV technology upgrade and staff training roadmap
Consider & analyse the cost of upgrading parking meters, pay stations, entry & exit barriers
Research and Invest in EMV certified terminal hardware and software technology
Analysing traffic flow and determining the best location to pilot EMV before a complete rollout
Understand traffic flow to maximise use of EMV in most traffic congested areas
Plan to implement “contactless” for improved efficiency of payment
Monitor best locations for EMV to minimize time spent searching for payment
Understand the liability shift and impact on processing fees, charge-backs and fines
CONSIDERATIONS / PLANNING / IMPLEMENTATION STRATEGIES
CONTACT
Stuart McGregor Business Development Manager
www.paymentexpress.com