U.S. EMV Migration Update A joint presentation from Citizens Commercial Banking and Worldpay
Mike Phelps National Director Convenience & Retail Fuel Finance Holly Fengler Vice President National Customer Relations
U.S. EMV Migration Update March 3, 2015 Visa Confidential
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What is EMV 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 code (a cryptogram) Prevents the data being re-used to create counterfeit cards 6 EMV Chip Migration Update March 3, 2015
How does EMV chip technology work? Because the cryptogram changes with every transaction, even if the card data is stolen, the information can t be used to create counterfeit cards because the cryptogram would have already expired 4 0 0 0 1 2 3 4 5 6 7 ^ J O H N D O E ^ 0 1 2 0 1 2 ^ 1 0 1 ^ 2 1 7 ^ Card number Name Expiry Service code CVV (STATIC) 4 0 0 0 1 2 3 4 5 6 7 ^ J O H N D O E ^ 0 1 2 0 1 2 ^ 2 0 1 ^ 3 8 6 ^ 98 12 4 35 21 5 36 48 06 81 79 3 8 34 02 91 6 7 13 45 8 3 08 65 21 9 4 08 13 2 14 2 39 08 7 ^ Card number Name Expiry Service code icvv Cryptogram (DYNAMIC) 4 0 0 0 1 2 3 4 5 6 7 ^ J O H N D O E ^ 0 1 2 0 1 2 ^ 2 0 1 ^ 3 8 6 ^ 98 12 4 37 21 5 64 3 06 81 79 2 86 34 02 91 5 7 8 13 45 6 31 86 52 0 29 4 81 30 14 2 7 90 83 ^ Card number Name Expiry Service code icvv Cryptogram (DYNAMIC) 7 EMV Chip Migration Update March 3, 2015
Visa U.S. EMV chip roadmap In August 2011, Visa led the industry by setting a plan to move the U.S. to EMV chip technology Successful globally, liability shifts have been the primary tool used to encourage both issuers and merchants to adopt EMV chip technology April 2013 April 2015 October 2015 October 2017 Acquirer EMV Chip POS Processing Mandate Acquirer EMV Chip ATM Processing Mandate POS Liability Shift U.S. domestic and cross-border AFD Liability Shift ATM Liability Shift U.S. domestic and cross-border Note: AFD = automated fuel dispenser 8 EMV Chip Migration Update March 3, 2015
EMV liability shift for counterfeit fraud U.S. Card Terminal Liability Today Mag stripe only Mag stripe only Issuer After October 1, 2015 for POS (C-store) Mag stripe only Mag stripe only Issuer Mag stripe only EMV chip Issuer After October 1, 2017 for AFD & ATM EMV chip Mag stripe only Acquirer EMV chip EMV chip Issuer There is no EMV liability shift on contactless or lost/stolen fraud transactions Note: Other non-counterfeit related dispute rights may still apply 9 EMV Chip Migration Update March 3, 2015
EMV chip readiness in the U.S. Credit 48 million EMV chip cards issued, majority credit, a 66% increase from September 2014 to December 2014 1 in 3 of the top 50 Visa credit issuers actively issuing chip credit cards Cobrand portfolios have started migrating to chip Debit Several debit issuers actively issuing; multiple pilots underway Debit EMV PV increased 30% from December 2014 to January 2015 Acquirers All major acquirer processors actively deploying EMV chip terminals Terminal manufacturers continue testing common debit AID Cross-industry efforts to define minimum terminal configuration requirements underway Merchants 100 thousand EMV chip activated merchant locations, a 26% increase from September 2014 to December 2014 Over half of domestic EMV PV generated by small merchants Several major U.S. retailers have launched or are preparing for early chip pilots in Q1 2015 Source: Cards per Operating Certificates as of 31-Dec-14; merchant locations based on VisaNet data for unique locations with chip transactions as of 31-Dec-14 10 EMV Chip Migration Update March 3, 2015
U.S. EMV chip migration 2015 forecast 1 EMV chip as % of U.S. total 80% 60% 40% 20% Issuers begin mass issuance Merchants begin activating terminals Significant ramp up in Q3 2015 Liability shift 70% 47% 41% 29% credit cards activated terminals debit cards chip-on-chip transactions 0% Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Sources: Cards per Aite Report EMV: Lessons Learned and the U.S. Outlook (June 2014); terminals per Payment Security Taskforce Acquirer projections press release (October 2014) ¹Forecast based on information currently available to Visa. Actual results may vary significantly. 11 EMV Chip Migration Update March 3, 2015
EMV Chip Resources to Support You 12 EMV Chip Migration Update March 3, 2015
Visit www.visachip.com Online destination for merchants, acquirers, issuers and consumers 13 EMV Chip Migration Update March 3, 2015
Cardholder education Turnkey direct mail for issuers Chip educational videos Search campaign Digital and social 14 EMV Chip Migration Update March 3, 2015
Implementation toolkit Interactive materials to help you implement your EMV chip strategy Chip overview 10-Step Implementation Guide Chip Overview Videos Information Graphics Downloadable POS Signage www.visachip.com/businesstoolkit 15 EMV Chip Migration Update March 3, 2015
EMV chip videos Watch EMV chip cards in action and hear from industry experts Visa Chip Card Introduction How to Use a Visa Chip Card EMV Chip Business Case for Merchants www.visachip.com 16 EMV Chip Migration Update March 3, 2015
Train your staff Three simple steps Step 1 Insert the chip end of the card into the terminal (instead of swiping) Step 2 Keep the card in the terminal while customer follows prompts to complete the purchase Step 3 Make sure your customer doesn t forget his card when he leaves Use videos to help you How to Use a Visa Chip Card 17 EMV Chip Migration Update March 3, 2015 Coming April 2015: Associate Training Modules in the Implementation Toolkit
Key learnings Take advantage of these learnings from previous EMV chip deployments 1 2 3 4 5 Make sure the EMV chip slot is accessible Guide your customers through the transaction Align your employee s screen with the terminal screen Use terminal actions to prevent cards left behind Think about your ideal customer experience Where are you going to place your POS terminal? How are you going to fasten the terminal to the counter? Prompt your customer to insert the card, leave it in the terminal, and then remove it Avoid confusion between your staff and your customers Also important in unattended lanes such as self-checkout or AFD Don t print receipt until card is removed Audio beep to remind cardholder to remove card Use same protocols as today in the event cardholder leaves card Develop your strategy based on customer experience Conduct early tests with your customers in mind 18 EMV Chip Migration Update March 3, 2015
Thank you 19 EMV Chip Migration Update March 3, 2015
Thank you for joining us Mike Phelps National Director Convenience & Retail Fuel Finance Holly Fengler Vice President National Customer Relations Worldpay, the logo and any associated brand names are trademarks of the Worldpay group of companies. Worldpay US, Inc. is a registered ISO/MSP of Citizens Bank, N.A. 2015 Citizens Financial Group, Inc. All rights reserved. Citizens Commercial Banking is a brand name of Citizens Bank, N.A. and Citizens Bank of Pennsylvania. Member FDIC.