innovation and transformation in payments...
Post on 28-Apr-2018
231 Views
Preview:
TRANSCRIPT
Assembly Banking and Finance Committee
March 16, 2015
Innovation and Transformation in Payments Technology
Retailer’s Bank
The Payment Ecosystem
Customer’s Bank
Card Network
Retailer Customer
• Provide processing technology and operational systems
• Set standards and rules of the road
• Build and manage global brand to promote usage
• Develop new marketplace opportunities and promote acceptance
Payment System Benefits
Role of Networks
Retailer Benefits
• Reliability
• Security
• Efficiency
• Guaranteed Payment
• Increased Sale Potential
• More Business Channels
• Access to More Customers
Customer Benefits
• Convenience
• Security
• Fraud Protection
• Global Acceptance
• Reliability
• Budgeting
****
EMV, Tokenization, and Encryption
are technologies designed to reduce
risk from payment data being stolen
and devalue the data if stolen80+% of fraud in US
US Payment Card Fraud
Data theft causes over 80% of payment card fraud in the US
What is EMV Chip Card Technology?
• EMV chip or “smart” cards are payment cards that have an embedded microchip
• Microchip generates a dynamic one-time use code (a cryptogram)
• Microchip contains the same data as a magnetic stripe, with the addition of the dynamic one-time use code
• Prevents the data being re-used to create counterfeit cards
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”
Card number Name Expiry Service
code
CVV
(STATIC)
4 0 0 0 1 2 3 4 5 6 7^ J OHNDOE^ 0 1 2 0 1 2^ 1 0 1^ 2 1 7^�
Card number Name Expiry Service
code
iCVV
4 0 0 0 1 2 3 4 5 6 7 ^ J OHNDOE^ 0 1 2 0 1 2^ 2 0 1 ^ 3 8 6 ^
Cryptogram
(DYNAMIC)
1 5 1 8 7 3 2 83 1 0 2 8 2 9 18 2 1 8 4 3 8 49 1 0 6 3 1 4 28 5 6 3 8 6 0 91 5 7 4 3 0 1 7 ^�2 4 8 0 1 8 0 31 5 1 8 7 3 2 83 1 0 2 8 2 9 18 2 1 8 4 3 8 49 1 0 6 3 1 4 28 5 6 3 8 6 0 91 5 7 4 3 0 1 72 4 8 0 1 8 0 34 3 1 2 3 6 8 93 6 7 9 4 5 1 03 4 9 1 5 2 3 85 8 3 6 8 1 2 7
Card number Name Expiry Service
code
iCVV
4 0 0 0 1 2 3 4 5 6 7 ^ J OHNDOE^ 0 1 2 0 1 2^ 2 0 1 ^ 3 8 6 ^
Cryptogram
(DYNAMIC)
1 5 1 8 7 3 2 83 1 0 2 8 2 9 18 2 1 8 4 3 8 49 1 0 6 3 1 4 28 5 6 3 8 6 0 91 5 7 4 3 0 1 7 ^�2 4 8 0 1 8 0 31 5 1 8 7 3 2 83 1 0 2 8 2 9 18 2 1 8 4 3 8 49 1 0 6 3 1 4 28 5 6 3 8 6 0 91 5 7 4 3 0 1 72 4 8 0 1 8 0 34 3 1 2 3 6 8 93 6 7 9 4 5 1 03 4 9 1 5 2 3 87 3 2 5 6 0 0 3
Domestic Counterfeit Fraud-- % Change from Q3 2008 to Q3 2013
Impact of EMV on Counterfeit Fraud
Brazil Mexico Hong Kong Canada
Counterfeit -87% -77% -69% -83%
2011 2012 2013 2014 2015 2016 2017
APRIL 2013
Acquirers and sub-
processor mandates to
fully process EMV
transactions
OCTOBER 2015
Liability shifts take
effect for face-to-
face (excluding
fuel)
OCTOBER 2016/2017
Liability shifts take
effect for ATMs OCTOBER 2017
Liability shifts
take effect for
automated fuel
dispensers
Roadmaps Announced
US Roadmaps to EMV Chip Technology
Source: EMVCo, Q4 2013, data combined from Visa, MA, Amex and JCB
Global EMV Adoption Rates
EMV Global Migration Progress
Current State
37Mterminals
2.4Bcards
Nine of the country’s largest payment card
issuers estimate that they will have issued
more than 575 million chip-enabled payment cards
by the end of 20151
Source: 1Payment Security Taskforce press release, August 13, 2014. 2Payment Security Taskforce press release, October 17, 2014
Forecast of participating acquirers estimated that at
least 47 percent of U.S. merchant terminals will be
enabled for EMV chip technology by the end of 20152
Progress on U.S. EMV Chip Migration
Payment Security Taskforce projections for U.S. EMV chip migration
Tokenization minimizes data risks by digitizing a single card
number into tokens on each separate device. The process of
digitization is what makes transactions secure.
How Tokenization Works
Merchant/
Cardholder
How Tokenization Works
Acquirer Network Issuer
Token
Token
Token
Token
PAN
PAN
Network Solutions
(3D Secure, Fraud Scoring, etc.)Improves Payment Authentication
PCI
Secures Data at the Point of Transaction
EMV Chip
Authenticates the Card
Tokenization
Minimizes Use of PAN Authenticates Mobile/CNP
EMV
****
Encryption
Tokenization
Encryption
Secures Data During Transmission****
Multi-Layered Protection
“Chip cards and tokenization are among the most promising tools for protecting retailers and
consumers from the theft and abuse of payment card data.” Attorney General Kamala Harris, California
Data Breach Report, October 2014.
top related