EMV Migration Updates and Next Steps

Transcription

1 EMV Migration Updates and Next Steps Michael Carrick, US Business Development Thursday February 16, :00 1:35

2 Agenda ACCEO Tender Retail Who We Are EMV Quick Facts EMV Adoption Rates EMV is a Four Letter Word; EMV Challenges The Impact of EMV Migration Security, Fraud, Chargebacks, Debit Routing EMV What Should You Do What s Next

3 ACCEO Tender Retail History 1985 Payment solution established 2007 First deployment of integrated EMV solution in North America 2007 First contactless solution deployed 2010 First end-to-end acquirer encryption solution 2012 Tender Retail acquired by ACCEO Solutions 200,000+ deployments in North America

4 Semi-Integrated Payment Solution Safe, simple and secure: Eliminates the middleman Simplified payment routing Less costly More secure

5 Flexibility For Merchants

6 EMV What s Your Problem? What issues are you facing? Just getting started? Is your payment device EMV capable? Are you having trouble with your POS integration? Are you waiting for EMV certifications? Is the EMV transaction too slow? Chargebacks?

7 EMV - Quick Facts: 3-Digit Service Code on MSR identifies if card is chipped A chip may have multiple Application ID s (AIDs) An issuer may send an update Script following a transaction The 1 st INIT of the PIN pad may require communication to the bank to obtain public keys In an EMV transaction, a payment application may talk to a PIN pad/chip 19 or more times

8 MasterCard (2016): EMV Adoption Rates 88% of MC US credit cards have chips, up 88% since 10/2015 About 2M chip-active merchant locations; representing 39 % of all U.S. merchants. 1.6 million are small and medium businesses Visa (2016) 408M Visa chip cards; more than US population 49% of Visa transaction dollar sales were chip Only 33% of Debit cards (December 2015)

9 EMV It s Not All Bad Counterfeit fraud has dropped by more than 52% where chip cards are accepted. Counterfeit fraud down 14% across all merchants Where did it go?

10 EMV - How Will It Change the Transaction? Standard Contact EMV requires a card to stay inserted throughout authorization; implement Quick Chip Transactions take 1-3 seconds longer, but it may feel longer Customer education may take longer yet Forget to insert/remove their card Read and follow the prompts on the PIN pad No more pre-swiping Customers are confused; does the retailer support their chip card

11 EMV - Why Is EMV Taking So Long? Processors have limited bandwidth for certifications Test tools not ready PIN pad firmware bugs Expired PIN pad I/O kernels EMV specs for PIN Debit AID released 6 months after initial Credit certifications began Payment middleware bugs Lack of knowledge

12 EMV Certification Process EMV software requires 2 certifications instead of 1 Payment Vendor Certification and Merchant Certification Contactless EMV is a separate certification EMV software is certified down to the PIN pad firmware and I/O kernel version these kernel may expire EMV software is certified with specific forms on a PIN pad that are signed by the processor Certifications must prove capable of handling chip cards from other countries

13 EMV is a 4 Letter Word Liability shift; October 2015 Chargebacks increasing exponentially 2016 estimates of 14.7M chargebacks worth $5.8 Billion dollars 21% higher than 2015 Industry discussion on whether they are all result of fraud? Chip & Signature still exposes merchants to fraud Lawsuits

14 EMV is a 4 Letter Word Credit Card associations are responding Quick Chip Limits on EMV Chargebacks (Effective until April 2018) Chargebacks < $25 due to counterfeit fraud in the U.S. will no longer be charged back to retailers. Limit card issuers to charging back 10 fraudulent counterfeit transactions per account. Visa has estimated that these changes will reduce chargeback transactions by 40% and the amount of chargeback dollars by 15%.

15 EMV Quick Chip Now supported by all card associations; Replicates MSR pre-swipe; 39% of customer s pre-swipe today Don t have to leave card inserted until transaction completes Card cryptogram (ARQC) validated with placeholder amount Final transaction amount authorization follows No final scripting update of chip required Accelerates the checkout process 3 seconds; vs. up to 13 seconds for EMV contact

16 EMV - Recommendations Yes, you still need P2PE even if you support EMV Support for PIN pad & Acquirer Solutions: Verishield TransArmor Safetech OnGuard Heartland Secure Voltage Security - HP

17 Tokenization & P2PE Are Not The Same Tokens: Returned by your Processor in authorization response Substitute value for customer card and expiration date Typically format preserving Token vault stored at Processor or Gateway This will tie you to that Processor Safe for storage and re-use: Refunds; Sales tracking across business channels; Card on file

18 EMV What Should You Do? Deploy EMV Implement Mobile Payments/Contactless Deploy P2PE Utilize Token

19 Questions?

20 Thank you for coming!