Concepts to Harness Multiple Benefits with EMV Technology

ACI Worldwide Podcast Series

EMEA has implemented EMV as well, and we're going to talk you through the benefits that will be seen in the US, and also set the scene for how this is going to work in the US as we, ACI, see it. Finally, the third person on the call is Bill Hanifin, who's the managing director of Hanifin Loyalty in the USA. We believe that loyalty will have an increasing role to play in the payments business, as both NFC cards and indeed mobile roll out. The plan is for us to talk to you about this, and then look for questions and answers at the end. Could I move to the next slide, please? Thank you.

The US is now the only G-20 country without EMV and has subsequently . . . for a long while, there's been a battle not to implement EMV in the US, mainly driven around the fact that the majority of card authorizations are done online. That now is the situation that's not sustainable and the schemes have moved to give the US an implementation, as well. Could I have the next slide, please?

This shows that Visa and MasterCard have put programs, mandates, and remote acceptance of chip cards in the USA. Visa's focused mostly at merchants acquirers and processors. MasterCard is focusing on ATM acquiring. This movement is a catalyst for EMV in the US. It will involve financial penalties and incentives, and it will get an infrastructure in place to support EMV to reduce fraud. That's one of the things we're going to cover today. We're also going to highlight some of the other things, the benefits of EMV will come to the United States.

It's not just about card issuance, it's also merchants and acquirers both point-of-serve and ATM who'll need to justify the investment in the EMV infrastructure. We're going to talk briefly about the changes and benefits that that will be. It will also include a view to future payment innovation, and here, we're going to talk about NFC. Next slide, please.

The Visa mandate includes RFID and NFC, and we're going to talk about that in some detail. Contactless cards and EMV: The US did contactless cards before; they did it only as a mag stripe edition. They're now rolling out much more strongly in Europe, and in some markets much more than others. We did a trial in London a few years ago, and the roll out is now starting to take shape. Again, we'll talk about the elements that need to be included in that. Mobile and EMV is also a key point. The secure element is one of the issues involved there, and we'll talk briefly about that. Payment credentials, mobile payments, and script changes will be part of that. Next slide, please.

Here we go. We're going to talk about the Magnificent Seven of EMV. I'm now going to hand over to my colleague, Dave Locke.

Good morning. My name is Dave Locke. I'm going to talk a little bit about 7 different aspects of EMV; how we think it will affect the States. I think it's fair to say we don't pretend we've got all the answers; that's certainly something in this world that nobody has, but hopefully we'll give you a few pointers and give you some idea of where to look and some of the experiences that we've gained. We're going to cover 7 of these things as we go through. The first one I'd like to cover is fraud. Can we go to the next slide, please?

The thing about fraud is that the frauds that they're innovating as much as anyone else. If you look here, this is a 14-year comparison. There are always lots and lots of statistics with EMV. One of the things that the UK has shown is that counterfeit cards and lost/stolen frauds has been reduced dramatically. It's difficult, the US doesn't keep fraud statistics in the same way as the UK does, but there is some open statistic. The statistics at the moment are saying 34% of fraud in the US is counterfeit. I don't think that's 44% of the whole amount because it isn't registered; it's only complaints that are registered, but it still shows that the considerable amount is something that will be sorted by EMV.

The issue with fraud is it's like a balloon. You'll take what it is and you'll change it. In this case, it will be EMV. The bad guys will just move somewhere else. Now we're in a situation where the banks have to react again and again differently, making each twist and turn a new thing. The thing is the right-hand corner is allegedly an anteater. If anyone wants the link on the web to make a balloon anteater, at the end of it, we can also supply that as well.