1. Midsouth User Group Annual Conference
EMV Update
Scott Guerin Senior Account Executive Fiserv Card Services

2. Card Fraud The $15 Billion Worldwide Problem
Everyone at one time will be breached
By Keith Alexander │ March 25, 2015
“The number of security incidents this year will be exponentially greater than last year,” John Chambers, chief executive of Cisco, the big Silicon Valley technology company, told The New York Times.

3. EMV Update

4. All transactions on any MasterCard network
Liability Shift Dates
P.O.S.
October 2015
ATM
October 2017
April 2013
Specific to cross border Maestro transactions where the issuer is Non-U.S. at a U.S. ATM
October 2016
All transactions on any MasterCard network
Pay at Pump/Gas
The push to jumpstart the migration of EMV in the U.S. began in August 2011 when Visa made an announcement to accelerate chip migration and adoption of mobile payments in the U.S. by setting processor requirements, retailer incentives and shifting the financial liability of fraud to those who are non compliant.
MasterCard, Discover and American Express announced their plans as well. With all four major card associations on board for EMV adoption, the wheels were put in motion.

5. What’s Going on in the Market
Credit
Debit
48 million EMV chip cards issued, majority credit
1 in 3 of the top 50 credit issuers actively issuing chip credit cards
Co-brand portfolios have started migrating to chip
Several debit issuers actively issuing; multiple pilots underway
Debit EMV PV increased 30% from December to January
U.S. EMV Chip Migration Forecast1
Credit cards
70%
Debit cards
41%
Activated terminals
47%
Acquirers / Terminals
Merchants
By the End of 2015
100,000 EMV chip activated merchant locations, a 26% increase from September to December
Over half of domestic EMV PV generated by small merchants
Several major U.S. retailers have launched or are preparing for early chip pilots in Q1 2015
All major acquirer processors actively deploying EMV chip terminals
Terminal manufacturers continue testing common debit AID
Cross-industry efforts to define minimum terminal configuration requirements underway
Sources: Aite Report, “EMV: Lessons Learned and the U.S. Outlook,” June 2014; Payment Security Taskforce Acquirer, October 2014¹Forecast based on information currently available to Visa.
Actual results may vary significantly.

6. The Debit POS Experience
Potential for Consumer Confusion
Insert chip card if the terminal has a slot
If nothing happens, remove and swipe the magnetic stripe
Prompted for PIN?
Prompted for signature?
Neither required?
You may not be given a choice
Know your PIN
Chip transactions are secure

7. The ATM Experience “Default” EMV processing causes consumer confusion
ATM software should remediate
Diebold is ready to support.
NCR in 2016

8. Educating Cardholders and Staff Is Critical
Cardholders are receiving and merchants are enabling EMV credit and debit cards on different schedules Need to insert chip card into the reader and wait for it to be processed, which takes longer Variation in EMV transaction experiences, even for the same card

11. CNP Fraud Currently Accounts for One-Third of Payment Card Fraud
Sources of Payment Card Fraud Globally, 2014
Source: CEB Tower Group, “Card Fraud Management Systems Market Update,” March 2015

12. EMV™ Alone Won’t Solve the Fraud Problem
EMV will reduce fraud for:
Counterfeit cards at merchant locations
Transactions covered by liability shift
EMV will not reduce fraud for:
Non-EMV transactions
Stolen cards
Card-not-present (CNP)
Criminals will follow the path of least resistance
CNP fraud in Europe surged more than 21% in 2013
Stolen
Card
Fraud
CNP
Fraud
Non-EMV Transactions
Source: European Central Bank “Third Report on Card Fraud,” February 2014

13. Card-Not-Present Fraud Today – and Tomorrow
CNP = $2.9B in 2014
CNP growth fueled by:
Growth in e/m-commerce
EMV
Tokenization is coming
Impact on fraud based on market acceptance
CNP expected to soar over the next three years
By 2018, losses will skyrocket to over $6B
Source: Aite Group Interviews with Payment Networks and 18 Large U.S. Issuers, April to May, 2014

14. Cardholder Engagement
Fiserv Can Help
Increasing fraud attempts through stolen cards, card skimming, phishing, counterfeit cards, insider fraud, card-not-present fraud, identity theft, first-party fraud, flash fraud and more
Cardholder Engagement
Authorization Validation
100% Real-Time Monitoring
Best Practices Optional Rule-Set
Advisory Services
Real-Time Rule Authoring

15. The Foundation: Authorization Validation Controls
Card status
Expiration date
Name matching
iCVV
CV/CV2
AVS
PIN
Activation
Transactions allowed
Accounts and balances
Limits/velocity

16. Card Risk EssentialsSM Real-Time Monitoring and More
100% real-time scoring
Best practices opt-in rules
CNP and international transactions
Compromised card tracking
Transaction blocking
Known locations, merchants
SMS and messaging

17. Card Risk EssentialsSM Real-Time Monitoring and More
Case management
Fraud notifications for cardholders
Trend watch notifications for FI
Risk webinars for staff training
Meaningful reports for monitoring
Optional access to risk consultants

18. Risk OfficeSM Advisor Advisory Services and More
Features included in Card Risk Essentials PLUS:
Dedicated risk consultant
Analysis of tagged fraud transactions
Rule authoring service
Risk portfolio performance reports
Premium fraud rule package
Custom action strategies