EMV and Other Credit Card Processing.pptx

8/10/2019 EMV and Other Credit Card Processing.pptx

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EMV and Other Credit Card ProcessingChanges

Bret Johnson Sr Director of Sales

2014 Total System Services, Inc. All rights reserved worldwide.


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Intelligence on the card supports Card Authentication Method (CAM)

Verifies that the card is authentic; hasnt been counterfeited SDA, DDA, CDA

Cardholder Verification Method (CVM) Verifies the individual using the card Adjustable to all card acceptance environments Online PIN Verified at the host, just like today Offline PIN Verified by the card Signature Verified by the cashier No CVM Required Just like no-signature and tap-and-go today

The CVM can be affected by other transaction details(e.g. amount)

EMV Counterfeit Card Fraud Elimination

2013 Total System Services, Inc. Confidential and proprietary. All rights reserved worldwide.3


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Affects all Acquirers merchants ,merchant p rocessors , ATMacquirers . What AIDs and ho w m anywil l the ir devices recogn ize andsuppor t?

Affects all Card Issuers What brands andne tworks do my ca rds be long to? Wha t AIDs andhow many do I need to load on to my ca rds?What AID/App is su pported b y my cardbrands/networks ? How w il l I personal ize andconfig ure the card based on fun ct ional i ty I wantto offer my cardholders?

Introduction to the AID and Application


VISA AIDMasterCard AIDAmerican Express AIDDiscover AIDDiners AID (International only)AID: Application ID

Application: Underlying EMV application on the card When an EMV terminal encounters an EMV card,

it must determine the correct AID and associated application

It is the application on the card that knows how to behave withthe terminal and construct the EMV transaction recognized bythe Card Network and Card Issuer


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First U.S. EMV Credit Cards

Credit Only Card

Single Brand

Single AID & Associated Application

Single AID and App supports bothDomestic and International Credit

Example: U.S. Credit Card

Example: VISA AID



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EMV Deployment

MilestonesKey Dates Visa MasterCard Discover American

ExpressNotes

PCI Audit Relief October 2012 Y Y

PCI Audit Relief October 2013 Y Y

POS Acquirer / ProcessorCompliance April 2013 Y Y Y Y Mandate for POS Acquirers

Maestro ATMLiability Shift April 2013 Y

Inter-Regional Maestro Cards at U.S. ATMs

Visa ATM EMV Mandate April 2015 Y Y Y

U.S. Third Party ATM acquirerprocessors must be able to support

EMV chip data for all Visa and/or PLUSbranded products

POS CounterfeitLiability Shift(Excluding Fuel Dispensers)

October 2015 Y Y Y Liability shift for merchants excluding AFD

POS Lost or StolenLiability Shift(Excluding Fuel Dispensers)

October 2015 Y Liability shift for merchants excluding AFD

MasterCard ATMLiability Shift October 2016 Y All MasterCard Branded Cards

Visa ATMLiability Shift October 2017 Y

Liability shift for all U.S. ATMs for allVisa and/or PLUS branded products

POS Counterfeit Liability Shiftfor Fuel Dispensers October 2017 Y Y Y Y Liability shift for AFD

POS Lost or Stolen LiabilityShift for Fuel Dispensers October 2017 Y Y Liability shift for AFD

Current Mandates / Liability Shifts

Published U.S. EMV Mandates and Liability Shifts



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Pymnts.com Interview Q & A


2. Many countries have already adopted EMV standards, but is EMVs relevanceshifting now that there are many ways to secure data transmitted during apayment?

EMV is not really about securing data, it is about authentication. Data on the transaction,generated by the chip, authenticates the card to the issuer, ensuring that it is not acounterfeit or "cloned" card. EMV transactions may also include a PIN, even for creditcards, which authenticates the cardholder to help prevent fraud through lost or stolencards. EMV is still the best existing technology in use today to authenticate cards andcardholders.Methods of securing data during transmission, such as encryption, help protect thesensitive credit card information, but do nothing to address authentication.

3. The countries that face EMV adoption now are living in a very different worldthan EMVs initial adopters. Whats the significance of EMV in a world thats

moving to a cardless environment?One of the major reasons for the initial adoption of EMV in Europe was to provide a wayof authenticating cards and cardholders in offline environments when communicationswere unreliable or prohibitively expensive to authorize every transaction online.


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For more information, visit www.emv-connection.com

How does NFC relate to EMV?

Near Field Communication (NFC) is a complementary technology thatEMV can utilize to enable contactless payments such as with mobilewallets. With the anticipated growth of NFC-enabled mobile devices forcontactless payments and other applications, EMVCo has been active indefining the processes for supporting EMV mobile contactlesspayments.

Consumers and businesses can benefit from NFC in several ways: Interactions are initiated by a simple tap of the device NFC is flexible; it is suitable for a broad range of uses in different industries

and environments NFC technology follows universally implemented ISO, ECMA, and ETSI

standards Transmissions are short range NFC works with current contactless cards and readers

All of the SE technology shown employs the same security and functional architecture of apayment application residing on millions of EMV cards today. Depending on the mobile deviceand payment model, the secure element may either be hosted in an embedded device, in aremovable SIM/UICC or in a separate device (e.g. a microSD card).

NFC and Mobile



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1. Why are EMV credit and debit cards and EMV payment transactions secure? EMV secures the payment transaction with enhanced functionality in three areas:

Card authentication, protecting against counterfeit cards. Cardholder verification, authenticating the cardholder and protecting

against lost and stolen cards. Transaction authorization, using issuer-defined rules to authorize transactions.

EMV cards store payment information in a secure chip rather than a magnetic stripe; the personalization of EMV cards is doneusing issuer-specific keys. Unlike a magnetic stripe card, it is virtually impossible to create a counterfeit EMV card that can beused to conduct a EMV payment transaction successfully.

2. How does EMV address payments fraud? First , the EMV card includes a secure microprocessor chip that can store information

securely and perform cryptographic processing during a payment transaction

Second , in an EMV transaction, the card is authenticated as being genuine, the cardholderis verified (PIN or Signature), and the transaction includes dynamic data

Third , even if fraudsters are able to steal account data from chip transactions, this datacannot be used to create a fraudulent transaction in an EMV or magnetic stripeenvironment, since every EMV transaction carries dynamic data

Fourth , EMV methodology can also potentially address card-not-present (CNP) fraud, withcardholders using their EMV cards and individual readers to authenticate Internettransactions

Previous Frequently Asked Questions



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The Target Breach

Will This Speed Up EMV Adoption?

2014 Total System Services, I nc. All rights reserved worldwide.


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The answer is yes, but not for the reason youwould probably think. EMV would not haveprevented the Target breach. It was caused bylack of network security. However, it did bring

light to the problems of credit card data securityin the US.There's general agreement that EMV alonewould not have prevented the Target breach, inwhich thieves accessed data from as many as110 million customer accounts. But EMV wouldhave reduced the value of the information bymaking it almost impossible to clone the cards.

2013 Total System Services, Inc. Confidential and proprietary. All rights reserved worldwide.#


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Why is the US slow in implementing EMV?

One reason could be because of cost. Traditional magneticstripe cards cost about $2.00, chip card can cost between$15-$20.Another problem with improving card security is that newcards will require new readers, and that presents a big

expense for merchants. Mag card readers typically costabout $20 in volume purchases while a chip reader costsabout $100



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More Information- -Canada started the EMV conversion in 2003

and is now about 85% complete.Implementation cost in the US estimated to beabout $6 billion, 75% will be borne bymerchants (Target estimates their cost to beabout $100 million)There are 1.1 billion credit and debit cards in

circulation, only 15 million chip cards issued inthe US


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More Information- -Canada started the EMV conversion in 2003

and is now about 85% complete.Implementation cost in the US estimated to beabout $6 billion, 75% will be borne bymerchants (Target estimates their cost to beabout $100 million)There are 1.1 billion credit and debit cards in

circulation, only 15 million chip cards issued inthe US


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If I spend the time and money to upgrade tochip accepting parking equipment, will I get

lower interchange rates?While this is the case in Europe andCanada, at this time it does not appear thatthe card brands are going to do this in theUS.



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Does EMV replace PCI DSS?The answer is no, you will still need todo an annual assessment. PCI DSS is totry to prevent credit card data beaches.EMV is designed to prevent fraud.



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What do you need to do now?

Speak to your equipment companies abouttheir plans for EMV conversion

The reality is that parking is a low fraud riskand implementation of EMV may be slow in ourindustry Be aware, but these is no need topanic



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Visa Mastercard Settlement Dec 13,2013 A federal judge gave Visa and MasterCard thego ahead on a $5.7 billion class action lawsuitto resolve merchant complaints regarding theswipes fees they are charged. There is a greatdeal of dissatisfaction from many retailorganizations because the deal does nothing toreduce swipe fees or keep them from rising inthe future.



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The settlement does allow merchants tosurcharge if customers use Visa orMasterCard. However, because ofcompetition and all of the regulationsregarding surcharging, few merchantsare doing this.



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Merchant Additional Fee Programs


January 2014


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Merchant Surcharging


Merchant Surcharging


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Click to edit Master title styleMerchant Surcharging

Visa and MasterCard modified their rules effective January 27, 2013 to permitsurcharging as part of a litigation settlement.

No MCC restrictions.

Permitted in all acceptanceenvironments, provided merchants

state permits surcharging. Several states have laws prohibiting

surcharges. Where laws conflict withVisa/MC rules, merchants should adhereto the law.

30 day advance notification /registration required. Visa MasterCard Discover Acquirer

2013 Total System Services, I nc. Proprietary. All rights reserved worldwide.24

Not permitted on debit or prepaidactivity.

Variable or flat/fixed amount

permitted; surcharge amount maynot exceed 4% or the merchantsaverage cost of acceptance,whichever is lower .

Must be included as a part of thetotal amount of the transaction attime of settlement.

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Merchant Surcharging (cont )


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Click to edit Master title styleMerchant Surcharging (cont.)

Discover modified their Op Regs in Mar. 2013 to include surcharge notification / registration & consumer disclosure criteria which aligns with that of V/MC.

If a merchant elects to surcharge,they must impose surcharge on ALLcredit card transactions accepted,regardless of network.

Permitted at brand level or productlevel.

Permitted on non-U.S. issued creditcards accepted at a U.S. merchant;

including U.S. territories. Specific fields containing surcharge

information must be supplied at thetime of transaction and passedthrough acquirer to Visa and MC.


Must not be assessed by any thirdparty. May only be assessed by themerchant that actually provides thegoods or services to the cardholder.

Merchants must surcharge MC &Visa on the same terms andconditions as any equal or highercost competitor that imposes limitson surcharging.

Surcharging practice disclosurerequired at point-of-entry and point-of-sale. Transaction receipt mustcontain a line item with the actualsurcharge amount.

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Programs At-A-Glance


Programs At A Glance


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Click to edit Master title style

Restricted to specificgovernment & educationMCCs

May be assessed in any

environment Variable or flat/fixed amount Separate transaction Assessed by merchant of

record OR 3 rd party serviceprovider

May be assessed on allcards

Registration required

Special PaymentNetwork Programs

Programs At-A-Glance


No MCC restrictions CNP environment only Flat/fixed amount Single transaction Assessed by merchant of

record Assessed on all payment

methods accepted

Convenience Fees

No MCC restrictions May be assessed in any

environment Variable or flat/fixed amount Single transaction Assessed by merchant of

record Must not be assessed on

debit or prepaid activity Registration required

Surcharging

Merchants are not permitted to apply more than one additional fee program to cardholders.


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Payment Network Rules

No Signature Programs August 2013


No Signature Program Rules


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Click to edit Master title styleNo Signature Program Rules

Program Names

MCC Eligibility

Transaction Criteria

Benefits

Resources

2012 Total System Services, Inc. All rights reserved worldwide.29

Program Names


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Click to edit Master title styleProgram Names

Visa Visa Easy Payment Service (VEPS)

MasterCard Quick Payment Service (QPS)

Discover No Signature Required (NSR) Program

American Express No Signature Program


MCC Eligibility


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Click to edit Master title styleMCC Eligibility

Visa 98% of businesses eligible to accept Visa may participate. Merchants with the following

21 MCCs are ineligible to participate:

MasterCard All merchant categories qualify, except quasi-cash, money transfer, direct marketing and

gambling.


MCC MCC Description MCC MCC Description

4829 Wire Transfer Money Orders 6011 Financial Institutions-Automated Cash Disbursements

5542 Automated Fuel Dispensers 6012 Financial Institutions-Merchandise Svcs

5960 Direct Marketing-Insurance Services 7995 Betting, incl. Lottery Tickets, Casino Gaming Chips, Off TrackBetting & Wagers at Race Track

5962 Direct Mktg-Travel Related Arrangement Services 9405 Intra-Government Purchases (Gov. only)

5964 Direct Marketing-Catalog Merchants 9700 Intl Automated Referral Service (Visa use only)

5965 Direct Marketing-Combination Catalog & RetailMerchants

9701 Visa Credential Server (Visa use only)

5966 Direct Mktg-Outbound Telemarketing Merchants 9702 GCAS Emergency Svcs (Visa use only)

5967 Direct Marketing-Inbound TelemarketingMerchants

9751 UK Supermarkets-Electronic Hot File(Region use only)

5968 Direct Marketing-Continuity / SubscriptionMerchants

9752 UK Petrol Stations-Electronic Hot File(Region use only)

5969 Direct Marketing/Direct Marketers (NEC) 9950 Intra-Company Purchases

6010 Financial Institutions-Manual Cash Disbursements

MCC Eligibility (cont )


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Click to edit Master title styleMCC Eligibility (cont.)

Discover All businesses eligible to accept Discover may participate, except merchants with the following

MCCs:

American Express All Industries eligible to accept American Express may participate, except High Risk

merchants or merchants placed in Amexs Fraud Full Recourse Program. Additionally, thefollowing MCCs are excluded from the No Signature Program:



4829 Money Transfer Non-Financial Institution 6531 Payment Service Provider Money Transfer for aPurchase

6010 Member Financial Institution Manual CashDisbursements 6532Payment Service Provider Member Financial InstitutionFinancial Institution Payment Transaction

6011 Member Financial Institution Automated Cash

Disbursements6533 Payment Service Provider Merchant Payment

Transaction6050 Quasi-Cash Member Financial Institution 6534 Money Transfer Member Financial Institution

6051 Quasi-Cash Non-Financial Institution 7995 Betting (e.g., Lottery Tickets, OTB)


5542 Automated Fuel Dispensers 7375 Information Retrieval Services

5964 Direct Marketing Catalog Merchants 7393 Protective Agencies & Security Services


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Benefits


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Click to edit Master title styleBenefits

Faster transaction speed Cardholder does not need to sign transaction receipt.

Cost-savings Cardholder does not have to be provided with a copy of the transaction receipt

unless they request one.

Chargeback protection On transactions that meet Visa VEPS criteria, chargeback protection exists on

reason codes: Illegible Fulfillment (60), Transaction Not Recognized (75) andFraud-Card Present Environment (81).

On transactions that meet MC QPS criteria, chargeback protection exists forfraud dispute reason codes: Requested/Required Information Illegible or Missing(4802) & No Cardholder Authorization (4837).

On transactions that meet Discover NSR criteria, chargeback protection existsfor the merchants failure to obtain the cardholders signature.

On transactions that meet American Express No Signature criteria, chargebackprotection exists for disputes based solely on the merchants failure to obtain thecardholders signature at the point of sale.


Resources


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Click to edit Master title styleResources

Additional information on certain payment network specificprograms can be found as follows:

http://usa.visa.com/merchants/payment_technologies/veps_faq.html

http://usa.visa.com/download/merchants/veps-for-merchants-us.pdf

http://www.mastercard.us/merchants/quick-payment.html

http://www.mastercard.com/us/merchant/pdf/QPS_Manual.pdf
http://usa.visa.com/merchants/payment_technologies/veps_faq.htmlhttp://usa.visa.com/download/merchants/veps-for-merchants-us.pdfhttp://www.mastercard.us/merchants/quick-payment.htmlhttp://www.mastercard.com/us/merchant/pdf/QPS_Manual.pdfhttp://www.mastercard.com/us/merchant/pdf/QPS_Manual.pdfhttp://www.mastercard.com/us/merchant/pdf/QPS_Manual.pdfhttp://www.mastercard.us/merchants/quick-payment.htmlhttp://www.mastercard.us/merchants/quick-payment.htmlhttp://www.mastercard.us/merchants/quick-payment.htmlhttp://www.mastercard.us/merchants/quick-payment.htmlhttp://usa.visa.com/download/merchants/veps-for-merchants-us.pdfhttp://usa.visa.com/download/merchants/veps-for-merchants-us.pdfhttp://usa.visa.com/download/merchants/veps-for-merchants-us.pdfhttp://usa.visa.com/download/merchants/veps-for-merchants-us.pdfhttp://usa.visa.com/download/merchants/veps-for-merchants-us.pdfhttp://usa.visa.com/download/merchants/veps-for-merchants-us.pdfhttp://usa.visa.com/download/merchants/veps-for-merchants-us.pdfhttp://usa.visa.com/merchants/payment_technologies/veps_faq.htmlhttp://usa.visa.com/merchants/payment_technologies/veps_faq.html

EMV and Other Credit Card Processing.pptx

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Transcript of EMV and Other Credit Card Processing.pptx