Designing an EMV Trial – What
Should You Consider Now?
Tracey Black
GFH Group Inc.
Cardware 2011
GFH GROUP INC.
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Agenda
• EMV Global Deployment Overview
• EMV Trial Considerations and Objectives
• UK Chip and PIN Trial and Implementation
• Ireland Chip and PIN Trial and Implementation
• Canada Chip and PIN Trial and Implementation
GFH GROUP INC.
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Worldwide EMV Deployment and Adoption – March 2011
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4
SEPA EMV Compliance, Deployment 2006-2010
•SEPA compliance requires EMV migration by December 31, 2010
100
80
Percent of Total
POS
60
Cards
40
20
ABMs
0
2006
2007
2008
2009
2010 - Q2
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Source: www.ecb.int/paym/sepa/about/indicators/html/index.en.html - European Central Bank SEPA Indicators EMV Readiness
K-W Trial Timeline
January
2007
October
2007
March
2008
October
2008
December
2008
Prepare Infrastructure
Market Trial
Trial
Review
Interoperability
Communications
Adoption
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Implementation Considerations - Industry
• Industry Structure
– Identify factors that will impact implementation such as fragmentation,
processor ownership, POS ownership; ABM ownership; integrated vs.
standalone merchants; merchant receptivity
• Payment Brand support
– Incentives; Liability shift; Alignment of key milestones; Fallback policies;
Testing and Certification approach; Competition vs. coordination
• PIN Management
– Reciprocal or Proprietary
• Communication
– Consistent, clear, aligned between industry and individual stakeholders
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Trial Considerations - Industry
• Location
– Representative of larger region (demographics, retail footprint etc.)
• Number of Participants
– Require multiple issuers, acquirers, small merchants, large merchants
and consumer groups to provide representative results and identify
issues prior to broader rollout
• Payment Brand support
– Certification; Testing; Leverage learnings from other implementations
• Communication and Training
– Industry level messaging to support consistent communication
• Trial Governance, including Project Management resources
– Governance structure; Scope of work and provider(s)
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Trial Considerations - Issuers
• Select, implement and deploy chip card platform
• Upgrade card production and personalization processes to support EMV
• Determine PIN Management strategies
• Update internal policies, processes and procedures to support
EMV(operations, fraud, disputes, chargebacks etc.)
• Develop internal and external communication plans, including creation
and distribution of cardholder materials
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Trial Considerations – Acquirers and Merchants
• Select, certify, test and deploy EMV-enabled POS terminals (hardware and
operating systems)
• Upgrade host systems to support authorization and settlement of EMV
transactions
• Revise internal policies, processes and procedures to support EMV
(chargebacks, disputes, help desk training etc.)
• Develop internal and external communication plan, including creation and
distribution of retailer training materials
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K-W Chip Trial – Key Industry Objectives
INTEROPERABILITY
•Confirm that the infrastructure works together as expected: all
chip cards work at all chip terminals (POS, ABM)
•Validate industry-level chip-related policies, testing and
certification processes, production testing
•Validate processes to be followed by issuers, acquirers and
schemes regarding issue identification, issue management and
issue resolution
COMMUNICATION
•Focus on the Trial with industry level PR communication at key
points during Trial
•Provide an industry voice for the Trial
•Validate industry level key messages
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K-W Chip Trial – Key Industry Objectives (continued)
ADOPTION
•Chip cards and terminals are rolled out in the Trial footprint
•Chip to chip transactions are occurring between chip-enabled
cards and chip-enabled terminals
•No decline in payment card usage
•Confirm a positive merchant and customer experience using chip
•Confirm positive awareness and perception of chip technology
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Trial Comparisons – UK, Ireland and Canada
UK Trial
Northampton, March
Ireland
Nathan-Newbridge
Industry
Structure
-Bank owned acquirers
-Limited number of
players
-Bank owned acquirers -Independent
-Limited number of
acquirers
players
-Limited number of
players
Payment Brand
Support
-Liability shift January
1, 2005 (Visa and MC)
-CVM Fallback allowed
until Feb 14, 2006
-Liability shift January
1, 2005 (Visa and MC)
-Laser participation
-CVM Fallback allowed
until Mar 17, 2007
-Visa Liability shift;
Interac migration
dates to Dec 31,
2015
-No CVM fallback
Implementation Big Bang
Timelines
Leverage reissue and
replacement
Leverage reissue and
replacement
PIN
Management
Reciprocal PIN change
Proprietary PIN
change
GFH GROUP INC.
Reciprocal PIN change
Canada
Kitchener-Waterloo
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Trial Comparisons - Continued
UK Trial
Northampton
Ireland
Nathan-Newbridge
Canada
Kitchener-Waterloo
Trial
Communication and
Training
Centrally managed
Centrally managed
communication plan communication
incl. website
plan incl. website
Centrally
managed
communication
plan incl. website
Metrics and
Reporting
Industry level
deployment
reporting during
national rollout
Surveys every
quarter during
national
deployment
Monthly industry
level reporting
during Trial
IPSO (4) and
contracted
consultants (2) and
PR resource
PMO funded by
the Payment
Brands; Trial
management
committee
Trial
APACs and
Management contracted project
management
resources
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Programme Structure - Ireland
IPSO BOARD
Chip & PIN
Steering Group
Card Payments
Group
Programme Office
IPSO
Vision – Operations & Implementation
PR Company
Testing
Working Group
PIN Mgmt
Working Group
Technical
Group
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Source: IPSO, Úna Dillon Head of IPSO Card Services
Acquiring
Forum
Communications
Forum
K-W Trial Governance Structure - Canada
Technical
Trial
Planning
Policy
STEERING
COMMITTEE
Testing and
Certification
MAF
GFH GROUP INC.
Note: MAF – Merchant Advisory Forum
Source: GFH Group Consulting
Project Management Office
Management Committee
Communications
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UK Trial Launch Press Release May 2003
The Chip and PIN Programme is an initiative backed by the UK’s banks, card
companies, building societies and retailers, coordinated by the British Retail
Consortium (BRC) and the Association for Payment Clearing Services (APACS).
They have joined forces to combat the serious problem of card fraud in the UK.
Chip and PIN is a much more secure way for more than 40 million UK
consumers to use their credit, debit and charge cards and most UK cardholders
will be using it by 2005….
Northampton has been chosen for the chip and PIN trial as it is
demographically representative of the UK as a whole. The town’s trial will be
crucial in confirming the best ways to roll out the new technology and
communications programme nationwide. It is expected that by the end of the
trial, Northampton consumers with the new cards will be prompted to use
their PIN for one in every two or three transactions as they shop in local stores
participating in the trial.
GFH GROUP INC.
Source: http://www.chipandpin.co.uk/reflib/first_uk_transaction.pdf
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Canadian Trial Launch Press Release October 2007
Canadian Payments Industry Commences Chip Trial in Kitchener-Waterloo,
Ontario
Kitchener-Waterloo, Ontario – October 16, 2007 – Members of the Canadian
payments industry — Interac Association, MasterCard Canada Inc., Visa Canada
Association and many of their respective card issuers, payment processors and
merchants –– today announced the beginning of Canada’s migration to chipenabled debit and credit cards, Automated Banking Machines (ABMs) and
merchant terminals starting with a trial in Kitchener-Waterloo, Ontario.
The trial of chip-based payments is designed to assess communications to
customers and merchants and allow participants to monitor merchant and
consumer awareness and adoption before continuing with the national chip
rollout. The trial will also allow participants to ensure the interoperability of
their respective cards and devices in a secure and controlled manner.
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Source: GFH Group Inc.
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Reporting – UK Implementation
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Reporting – Canadian Trial, Card Deployment
Total Chip Cards in KW Footprint
There were ~460,000 cards in the Trial Footprint as of October 31, 2008
700,000
600,000
500,000
400,000
300,000
Forecast
Actual
200,000
100,000
0
GFH GROUP INC.
Source: GFH Group Inc.
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Reporting - Canadian Trial, POS Deployment
Total Terminals in KW Trial Footprint
3 Brands
2 or More 2,105
39%
Brands
GFH GROUP INC.
Source: GFH Group Inc.
2 Brands
1 Brand
0 Brands
2,174
40%
2,479
46%
2,660
49%
2,663
49%
2,981
55%
3,080
57%
3,168
59% 21
Lessons Learned, UK - Retailers
• Specifically designed for retailers, the report looks at lessons learnt from
the three-month chip and PIN trial in Northampton which started in May
2003 and how these should be used during the national rollout.
• A key message of the report is that retailers who own their own integrated
point-of-sale equipment should act early to implement chip and PIN. “The
trial showed that time is a crucial factor and allowing enough time for
planning, testing, approvals, training and implementation is crucial to
success.” (David Smith, British Retail Consortium)
• Specific lessons for retailers for the national rollout included:
– The need to engage software and hardware suppliers early
– A good two-way relationship with acquiring banks is crucial
– Allowing enough time for testing is key to success
– Retailers should consider the needs of people with disabilities early in
the process
GFH GROUP INC.
Source: http://www.chipandpin.co.uk/reflib/first_trial_report.pdf
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Lessons Learned, Canada – June 2010
“Did Well”
• Inter-scheme technical harmonization was extremely valuable
• Independent PMO was invaluable in bringing all stakeholders
together to focus on launching chip
• Industry trial identified issues in a contained setting and
permitted for resolution plans prior to national rollout
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Lessons Learned, Canada – June 2010 cont’d.
“Next Time”
• Alignment of brand timelines could have facilitated
implementation
• Engage merchant associations earlier on to support merchant
awareness
• Ensure understanding of stakeholders with unique needs
• Identify the impacts of multiple large initiatives
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Lessons Learned, Canada –June 2010 cont’d.
“Always”
• Be prepared for domestic and international surprises
– Multiple areas of focus
• EMV, PCI, Contactless, Debit, Mobile
– Security threats
– Hardware and software issues (kernel expiry, ESD)
– Merchants not allowing magnetic stripe transactions
• Keep an eye on the future
– Mobile
– Authentication
– Fraud
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Questions?
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Extra Content
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