MasterCard and Multos: A View to EMV Across Markets with a ... · from payment innovation. Foundation for the Next Generation of Payment Products and Services Page 2 ... Latin America/Caribbean

©2011 MasterCard. Proprietary and Confidential

Oliver Manahan, Vice-President Emerging Payments MasterCard Worldwide

MasterCard and Multos: A View to EMV Across Markets with a Focus on the US


We’re moving toward a

world beyond plastic,

where every device has

an opportunity to be a

commerce device.

MasterCard will help our

customers get the most

from payment innovation.

Foundation for the Next Generation of Payment Products and Services

Page 2


Dynamic Transactions

Mag-stripe technology automated the paper-

based payment system – 45 years ago

• Mag-stripe card data is static – it can be copied,

replayed and abused.

• Issuers are blocking overseas mag-stripe

transactions - some of MCW’s most profitable

transactions

Chip digitises the payment system

• Each and every transaction is unique

• Governments are mandating dynamically

authenticated transactions

• However, it is much more complex and difficult

to maintain global interoperability

February 11, 2013 Page 3


No preparation for migration

Source: MasterCard data and internal estimates as of Q2 2012

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%

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

SAMEA

• 12 markets > 40% EMV

infrastructure penetration

• 10 markets > 80% ATM

penetration

EMV Is a Proven, Scalable Technology

June 28, 2012 Page 4


Source: Best estimates collected from MasterCard customers and regional offices, and QMR.

Today’s environment is

far advanced from when

EMV was implemented in

much of the world.

Large-scale global

deployment has

greatly lowered the

cost for U.S. issuers.

24/7 connectivity,

mobile lifestyles, and

smartphones fuel

consumer demand.

With 1.5 billion chip

devices in 130 countries,

EMV is a proven, future-

proof platform.

EMV Is a Proven, Scalable Technology


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%


Five Key Elements of MasterCard Approach

Page 6

Liability Hierarchy

Aligning Transaction Rules

Account Data Compromise Protection

.

Secure All Channels

Industry Coordination

.



MasterCard U.S. Roadmap

2012 2013 2014 2015 2016 2017

October 2012 PCI audit relief takes

effect

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 2013 MasterCard Account

Data Compromise relief

takes effect (50%)

October 2017 MasterCard liability

hierarchy takes

effect for automated

fuel dispensers


October 2016 MasterCard liability

hierarchy takes

effect for all US ATM

transactions


A Platform for Value-Added Services

Transit High-speed payment for

mass transit systems

Mobile Mobile phones enabled for contactless payments

Multi-Account Choice of debit, credit, or prepaid on one card

Display Card One-time secure codes and issuer information display

Authentication Highly secure remote

banking and payments via internet or phone

PayPassTM

Fast, Tap & Go™ contactless payments

Social Cards Processing of discounts and

other entitlements integrated with payment

May 21, 2012 Page 8


Canada 2008…

• All MasterCard branded consumer cards are dual-

interface (both contact and PayPass)

• Most credit cards allow for cash access through

Interac; Debit cards have (e.g.) Cirrus for Int’l access

– Therefore, cards would have > 1 AID and with 1 App

• Multos solution: delegator app allowing multiple AIDs to

point to one application, with minimal overhead

Page 9 June 29, 2012

Canada – a Success Story with Multos

M/Chip4

MC AID

Interac AID

©2011 MasterCard. Proprietary and Confidential Page 10

June 29, 2012

Fragmented regional networks play a significant role regarding when debit migrates to EMV

Pulse

Star West Interlink MAC

Interlink

Star West

Interlink

Accel

Alaska Option

Star West Interlink Maestro AFFN

Star East Pulse MAC

Star East MAC

NYCE East

MAC

NYCE East

Shazaam

Star Central

THYME

Cash Station

NYCE Midwest

Interlink Pulse MAC

Others Regional Networks :

• Vantiv

• Co Op

• ATH

• Jeanie

• Credit Untion 24

Global Networks :

• Visa (Interlink)

• MasterCard (Maestro)

• Discover (Pulse)

• American Express

©2011 MasterCard. Proprietary and Confidential Page 11

June 29, 2012

Durbin Amendment Complicates EMV Migration

• Durbin Amendment

– Fee structure established

– Merchant/Acquirer /Cardholder choose transaction routing

– Issuer cannot influence routing

– Eliminates Network/Issuer exclusivity agreements

– Durbin Amendment requires at least 2 unaffiliated routing options

• Secure Remote Payments Council (SRPC)

– Consortium of 21 independent regional payment networks

– Ongoing discussions to define EMV roadmap and specifications


Considerations

• Global and regional networks will likely require > 1

AID

• Possibility for several AIDs

• Multi-vendor card bureau sourcing is typical

• Understand the options available in market

• Ask questions of those who have implemented

U.S. Landscape

Page 12 June 29, 2012

Documents

MasterCard and Multos: A View to EMV Across Markets with a ... · from payment innovation. Foundation for the Next Generation of Payment Products and Services Page 2 ... Latin America/Caribbean