Carolyn Balfany Group Head, Product Delivery EMV: The Next Generation of Payments 2012
MasterCard EMV Video Page 2
EMV Chip Transaction Flow Card Authentication Cardholder offers card to reader Cardholder Verification Cardholder enters PIN or signature Transaction Authorization Transaction is approved, card is removed Page 3
Magnetic Stripe vs. Chip Fixed content Passive Limited data One size fits all Flexible content Active High capacity Tailored to your needs Page 4
EMV is a Proven, Scalable Technology Canada 95% of cards 70% of POS 50%+ of ATMs EMV chip-enabled Europe 70%+ of cards EMV chip-enabled 90% of ATMs and POS EMV chip-enabled Asia-Pacific 25% penetration of cards, 50% of POS devices Latin America / Caribbean 80%+ of acceptance now EMV chip-enabled Brazil, Mexico, Venezuela, Colombia most advanced Middle East & Africa 12 markets > 40% EMV infrastructure penetration 10 markets > 80% ATM penetration No preparation for migration One or more banks migrating or have completed migration to EMV chip Penetration of MasterCard-branded EMV cards, EMV POS or EMV ATMs exceeds 50% Source: Internal data and estimates as of 2Q 2012 Page 5
Benefits of EMV Chip for U.S. Payments Ecosystem Large-scale global deployment has greatly lowered the cost for U.S. issuers 24/7 connectivity, mobile lifestyles, and smartphones fuel consumer demand Today s environment is far advanced from when EMV was implemented in much of the world With 1.5 billion chip devices in 130 countries, EMV is a proven, future-proof platform No preparation for migration One or more banks migrating or have completed migration to EMV chip Penetration of MasterCard-branded EMV cards, EMV POS or EMV ATMs exceeds 50% Source: Estimates from MA customers, internal data and estimates Page 6
Five Key Elements of MasterCard Approach Liability Hierarchy Aligning Transaction Rules Account Data Compromise Protection Secure All Channels Industry Coordination http://www.mastercard.us/mchip-emv.html Page 7
MasterCard U.S. Roadmap October 2012 PCI audit relief takes effect October 2013 MasterCard Account Data Compromise relief takes effect (50%) October 2015 MasterCard ADC relief takes effect (100%) MasterCard liability hierarchies take effect (excluding fuel) April 2013 Acquires and sub-processor mandate to fully process EMV transactions Cross-border Maestro ATM liability shift to non-emv ATMs October 2016 MasterCard liability hierarchy takes effect for all U.S. ATM transactions October 2017 MasterCard liability hierarchy takes effect for automated fuel dispensers Page 8
Benefits of EMV Chip for U.S. Payments Ecosystem Issuer Acquirer Tailored Offers and Coupons Convenience and Savings Merchant Enhanced Security ACCOUNT HOLDERS Universal Acceptance Processor Integrated Payment Experience and Benefits Government Page 9
MasterCard Innovation with M/Chip PayPass Fast, secure Tap & Go contactless payments Authentication Highly secure SecureCode / remote banking Transit On card data for high speed transit payment M/Chip TM Mobile EMV strength payments using NFC & secure element Multi-Account Consumer choice of debit, credit, or prepaid on one card Benefit Cards Discounts and other entitlements integrated with payment Display Card On card one-time secure codes and issuer information display Page 10