EMV: GET READY Michelle Thornton, CO-OP Financial Services
EMV Technology EMV and Chip Used Interchangeably In essence it replaces the functionality of magstripe with a computer chip making it nearly impossible to counterfeit Small microprocessor embedded Chip contains an operating system and one or more applications and AIDs EMV is the technology specifications on the chip Visit co-opfs.org/emv to view previous EMV webinars
EMV Payment Applications An EMV payment application is the software that determines the actions of the card and transaction EMV payment applications are network specific Only the four national networks have applications The terminal and card must have the same application loaded U.S. deployment today has only one application on the card
Terminology What s on the Cards EMV Application EMV compliant software on the chip EMV Application ID (AID) Written onto chip during card production Identifies owner of the application Helps the terminal work to process the card options AID 1 CVMs EMV Chip AID 2 CVMs AID specifies encryption keys, networks and contains parameter lists like CVMs APPLICATION Multiple AIDs can use the same application on a chip Cardholder Verification Methods (CVMs) Methods to verify cardholder for that card and terminal for that EMV AID Signature, Online PIN, Offline PIN, No CVM 4
Terminology What s on the Terminal POS /ATM Terminal AID 1 AID 2 AID 3 EMV Compliant Kernel Application EMV Compliant Kernel Contains the EMV compliant terminal application EMV Application ID (AID) AID specifies which applications are accepted AID specifies parameters, like CVM and networks
INDUSTRY UPDATE
Debit Logjam Broken with Common AID Durbin requirements and issuer/acquirer need to have network choice has stalled debit until now Debit Network Alliance helped get us to a workable solution Visa and MasterCard long term license agreements with PIN debit networks Common AID allows acquirers to route to any network licensed to the common AID Allows issuers and acquirers to maintain existing relationships with their networks
How Common AIDs will work VSDC App M-Chip App Visa US Common AID Visa Standard AID Maestro AID MC Standard AID
Implementation of Common AID Solution Work To Do, Especially Terminals Hurdles include acquirer adoption and implementation time frames POS and ATM terminal manufacturers will need do development to enable the terminal to ignore EMV rules and select the AID it wants versus the prioritized global AID Card Vendors need to develop code to add two AIDs on the card Processors need to recognize multiple AIDs on one network link
Planning and Operationalizing
Planning for EMV Learn as much as you can about EMV Analyze existing debit, credit and ATM traffic International transactions Fraud losses Start with credit and ATMs Use learnings from credit to plan for debit Don t move on debit until terminals are ready
Planning for EMV Use CO-OP budgeting tool to estimate costs Anticipate implementation logjams in industry beginning in 2015 Remember liability shift is just that, not a mandate Implementation timelines running 4-6 months
Timing: Things to Consider Cards: Credit first, then debit Issuance plan Card type: contact or dual interface Custom card or pay-as-you-go CVM Profile: impact on interchange revenue Have your networks signed a licensing agreement with your global network? CO-OP Early Planning Guide
Timing: Things to Consider ATMs Upgrade with readers and kernel Strategically choose deployment footprint Understand how your terminal manufacturers plan to support AID Standard EMV code will either choose the global AID or force the cardholder to choose which AID to use Don t load AIDs until ATM can select the common as a default AID Verify and test terminal for AID prioritization and selection
Operationalize EMV EMV will be the new norm how to adapt Don t think of EMV as a project: Think of it as a new way to do business Broaden knowledge base within credit union at all levels Understand it will have impact on members and staff
Operationalize EMV EMV the new norm equip to respond Anticipate staff resource needs in operations, member service and marketing/communications Start educational communications prior to issuance
Expect EMV to take 10+ Years Most experts expect the U.S adoption to take many years EMV will help solve fraud for card present transactions EMV will help solve for international interoperability EMV will not prevent more breaches
CO-OP Roadmap Certified with Visa and MasterCard on debit Certified with Visa and MasterCard TMG full-service credit In beta with Visa and MasterCard on in-house credit Preparing for Visa and MasterCard beta on debit common AID Contact, online PIN only: roadmap to support dual interface and offline PIN CO-OP will provide training materials and recommendations for member communications
CO-OP Tools EMV budgeting tool EMV early planning guide FAQs Webinars and white papers Coming: Additional training webinars Member communications plans Member communication templates Visit the CO-OP EMV Resource Center www.co-opfs.org/emv for up-to-date information
Questions? Visit www.co-opfs.org/emv for up to date information on EMV.