1 U.S. EMV Migration Update and Best Practices Hap Huynh, Senior Director Risk Products April 2015

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3 U.S. EMV chip migration update

4 Visa U.S. EMV chip roadmap In August 2011, Visa led the industry by setting a plan to move the U.S. to EMV chip technology Successful globally, liability shifts have been the primary incentive used to encourage both issuers and merchants to adopt EMV chip technology Acquirer EMV Chip POS Processing Mandate Acquirer EMV Chip ATM Processing Mandate POS Liability Shift U.S. domestic and cross-border AFD Liability Shift ATM Liability Shift U.S. domestic and cross-border April 2013April 2015October 2015October 2017 AFD = Automated Fuel Dispenser Visa Confidential

5 EMV liability shift for counterfeit fraud There is no EMV liability shift on contactless or lost/stolen fraud transactions Note: Other non-counterfeit related dispute rights may still apply Visa Confidential

6 Best practices should reduce complexity, cost and time-to-market 1 Exception may exist for contactless cards for transit use only Card personalization best practices Visa Confidential

7 EMV chip CVM considerations for the U.S. Minimize stakeholder and cardholder impact Credit in the U.S. is not currently configured to work with PIN, and not all cardholders know or want to use a PIN at the point of sale Adding PIN for credit would greatly increase the time and investment required to migrate to EMV chip Maximize fraud impact EMV chip by itself greatly reduces counterfeit fraud; PIN doesn’t stop counterfeiters, only lost and stolen PIN is “static data” – easily skimmed and phished, typically resulting in ATM fraud Optimize usability PIN is not an appropriate solution for all environments (e.g., restaurants, small ticket, ecommerce) PIN is not globally interoperable, signature is the only global standard for cardholder verification Visa Confidential

8 U.S. EMV Migration − client readiness report Sources: Current cards per Operating Certificates as of December 31, 2014; credit / debit card forecast per Aite Report – EMV: Lessons Learned and the U.S. Outlook (June 2014); activated terminal forecast per Payment Security Taskforce Acquirer projections press release (October 2014) ¹Forecast based on information currently available to Visa. Actual results may vary significantly. 48 million EMV chip cards issued, majority credit 1 in 3 of the top 50 credit issuers actively issuing chip credit cards Cobrand portfolios have started migrating to chip Credit Several debit issuers actively issuing; multiple pilots underway Debit EMV Payment Volume increased 30% from December 2014 to January 2015 Debit 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 Acquirers / Terminals 100 thousand EMV chip activated merchant locations, a 26% increase from September 2014 to December 2014 Over half of domestic EMV Payment Volume generated by small merchants Several major U.S. retailers have launched or are preparing for early chip pilots in Q Merchants U.S. EMV Chip Migration Forecast 1 By the End of 2015 Credit cards 70% Debit cards 41% Activated terminals 47% Visa Confidential