EMV Migration Update Latin America and Caribbean Region

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1 EMV Migration Update Latin America and Caribbean Region Fernando Mendez Head of Emerging Products Visa Inc. Latin America and Caribbean EMV Migration Forum December 11-12, 2013 Biltmore Hotel - Coral Gables, FL

2 Disclaimer The information, recommendations or best practices contained herein are provided "AS IS" and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. When implementing any new strategy or practice, you should consult with your legal counsel to determine what laws and regulations may apply to your specific circumstances. The actual costs, savings and benefits of any recommendations, programs or best practices may vary based upon your specific business needs and program requirements. By their nature, recommendations are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Assumptions were made by us in light of our experience and our perceptions of historical trends, current conditions and expected future developments and other factors that we believe are appropriate under the circumstance. Recommendations are subject to risks and uncertainties, which may cause actual and future results and trends to differ materially from the assumptions or recommendations. Visa is not responsible for your use of the information contained herein (including errors, omissions, inaccuracy or nontimeliness of any kind) or any assumptions or conclusions you might draw from its use. Visa makes no warranty, express or implied, and explicitly disclaims the warranties of merchantability and fitness for a particular purpose, any warranty of non-infringement of any third party's intellectual property rights, any warranty that the information will meet the requirements of a client, or any warranty that the information is updated and will be error free. To the extent permitted by applicable law, Visa shall not be liable to a client or any third party for any damages under any theory of law, including, without limitation, any special, consequential, incidental or punitive damages, nor any damages for loss of business profits, business interruption, loss of business information, or other monetary loss, even if advised of the possibility of such damages. 2

3 EMV adopted in 22 countries Visa Latin America and Caribbean Region Argentina Aruba Bolivia Brazil Chile Colombia Costa Rica Curacao Dominican Republic Ecuador El Salvador Guatemala Honduras Mexico Nicaragua Panama Paraguay Peru Puerto Rico Trinidad & Tobago Uruguay Venezuela 12 additional countries on the pipeline National Rollout: Bolivia, Brazil, Chile, Colombia, Guatemala, Mexico, Panama, Venezuela 3

4 LAC Chip Migration Status Issuance and Payments Volume 4

5 LAC EMV Chip Migration Status Payments Volume Penetration 5

6 Visa Liability Shift Dates Latin America and Caribbean LAC Region Brazil and Mexico (all POS transactions) 1 April 2011 Venezuela (all domestic counterfeit POS and ATM transactions) 1 January 2012 Brazil and Mexico (all transactions) 1 October 2012 All other LAC countries (all counterfeit POS transactions) 1 October 2012 All other LAC countries (all transactions) 1 October 2014 Source: Visa Operating Regulations 6

7 Case Study: The Value of Chip A success story in Brazil 7

8 Fact #1 EMV demonstrated to be an effective tool to reduce Counterfeit Fraud 8

9 Brazil Counterfeit Fraud Visa Portfolio 9

10 Brazil Fraud Reduction Estimate Visa Portfolio 10

11 Counterfeit Fraud Reduction in Brazil Visa Portfolio US$362 MM in estimated savings over a 2 year period 11

12 Fact #2 EMV can increase Authorization Approvals 12

13 Increase in Approval Rates in Brazil Visa Portfolio 13

14 Key Learning and Best Practices Keep it Simple 14

15 Learning and Best Practices Use Visa s recommended personalization templates to reduce complexity: Ø Visa LAC: +12 years with NO EMV issuer interoperability problems Visa Chip Services (CAM / icvv Convert) remove complexity related to issuer host system changes Online-only cards reduce key management complexity related to Public Key Certificates (Certificate expiration dates may become a future point of failure if you do not keep a strict control) Chip s higher security helps Issuer s authorization criteria to be less rigorous for chip-authenticated transactions, generating higher approval rates, better customer experience and increase in sales Education is key (Merchant, Cardholder, Customer Service departments) When possible follow a segmented migration approach 15

16 Thank You 16