The World Leader in Display Card Manufacturing

Digital Dynamic CVV/CVC Codes on EMV Cards

Francine Dubois – NID Security

NIDSecurity–AnOTcompany

NID Security

NIDSecurity

2

Migration to EMV: The impact on CNP Fraud

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

3

ABOUTEMV

Reduc<onincard-presentfraud

Enhancedcardauthen<ca<onEnhancedcardholderverifica<on(PIN)Dynamicdataauthen.ca.on/authen.ccardrequired

PaymentinfostoredonsecurechipCounterfei.ngvirtuallyimpossible

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

4

FRAUDTRENDS&DRIVERS

CNPfraudlossesrepresentmorethan60%oftotalfraudinEuropetoday

Globaladop<onofEMVcausesfraudtomigratetopathsoflowerresistance

GrowthofUSonlinecommerceandtransac<onsaLractsfraudsters

9% CAGR 2012-2017

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

5

RISEOFCARDNOTPRESENTFRAUD

EMVenablesstrongdecreaseofcounterfeit/CPfraud,butfraudismigraLngtoCNP

1. Source: Canadian Bankers Association

US:CardNotPresent(CNP)fraudlossestoreach$6.4Bbyend2018

Europe: • CNP fraud accounts for 60% of the total value of card fraud in 2012

• CNP fraud increased by 21% to €794M

“DatafromtheU.K.,FranceandAustraliashowthatCNPfraudbecamealargerpor.onofoverallfraudduringandaDertheirEMVchipconversions,asEMVchipdrama.callyreducedthecard-presentfraudissuesbutdidnotaddressthecard-not-presentfraudproblem.“(WhitePaper,EMVMigra.onForum)

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

6

CNPFRAUD,AREALITYINDIFFERENTREGIONS

AustraliaTotalCardFraudValue$AUS300M

2014(+16%vs.2012)

23%

77%

CanadaCreditCardFraudValue$CAD465M

2013(+6%vs.2012)

36%

64%

17%

23% 60%

ATMsPOSterminalsCard-not-present

40%

28%

32%

OtherCard-not-present+11%

OtherCard-not-present Card-not-present

OtherCounterfeit

UKTotalCardFraudValue£479M

2014(+6%vs.2013)

69%

31%

OtherCard-not-present+10%

Sources:ECB,UFFAUK,,CanadianBankersassocia.on,APCA,CyberSource,USFederalReserve,AITE

EuropeTotalFraudValue€1.33B

2012(+15%vs.2011)

USATotalGPCardFraud

Value$4B2012

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

7

FIGHTINGCNPFRAUD–ADIFFICULTBALANCE

April11,2016

Security

OperaLngcosts

Useracceptanceandexperience

Easeofdeployment

TheidealsoluLon …butinpracLce

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

8

SAMPLEOFAUTHENTICATIONSOLUTIONS

3D Secure Tokenization Secret question

SMS

Keyfob/calculator Biometrics Virtual cards

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

9

CNPFRAUDIMPACTONISSUERS

Issuers and end-users eventually get refunded but… Ø  Cost of treatment of fraud cases and card replacement on

issuers Ø  Lost revenue while card is replaced and loss of recurring

revenue if switched to other card Ø  Cardholders : “I’m not well protected” – “maybe I should limit my

online activity?” Management of recurring billing on card, …

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

In this instance, not the PAN, but the “security code”

10

THETREND–TOKENIZATIONOFCARDDATA

Stolen data used within 10-30 days

following theft

Dynamic code valid for less than 1h

Security code is the easiest data

to turn dynamic

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

11

COMPLEMENTSTOKENIZATION

End User Merchant Processor

Card info + DCVX2 9876 0123 4567 8901 + 976

Surrogate card info(tokenized data) 1000 6661 3334 8901+ 456

§  HelpspreventfraudulentuseofstolencardinfoforCNPtransac<ons

§  Addsalayerofprotec<onatendpointsagainst:§  The]ofentered/swipeddatabymalware,keyloggers,trojans,

eavesdropping,shouldersurfing(i.e.duringenrollment)§  The]ofstoredplaindatainlegacysystems§  The]ofcardinforma<ontransmigedoverclearchannels(phone,fax,

mail...)

NIDSecurity

12

DYNAMIC CVV/CVC CODES ON EMV CARDS

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

13

WHATISADYNAMICCVV/CVCCODECARD

§  Automa<crefreshofdynamiccode(customizablefrequency)

§  SmallDisplay§  InternalbaLerythatlastupto5yrs

§  Standardcreditcardformat(ISO7810)

§  Accommodatesallstandardcardfeatures:contact-contactlesschip,embossing,magne<cstripe,…

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

14

HIGHLEVELVIEWOFIMPLEMENTATIONSCENARIOS

A.TokenServiceProvider B.Hostedbyprocessor

Merchant Merchant

NetworkNetwork

Processor

dCVx2VerificaLonServer

Processor

SaaSTSP

C.Hostedbyprocessingbank/issuer/agent

Merchant

Network

dCVx2VerificaLonServer

Bank/Issuer/Agent

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

15

SAFER,FRICTIONLESSCNPTRANSACTIONS

§  Safertransac<onsoveranychannel(ie:website,app,voice…)

§  Simpleandelegantsolu<onthatworksonanydevice

§  Fric<onless,nocomplexenrollmentprocess

§  Noaddi<onalso]wareorpluginrequired

§  Cardinfolessvulnerableif

device/computerislostorstolen

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity

16

PERFECTSOLUTIONTOSECURECNPTRANSACTIONS

Simultaneouslyaddressestheneedsofissuers,merchants,andend-users

Controlled,predictableTCO,

virtuallyanewcardateveryrefresh

Topofwallet,100%cardholderadop<on,FricLonless,zerolearningcurve.

Moresecure.TokenizestheCVC/V2,protectsatthesource

Lowimpactoninfrastructure.

Anissueronlysolu<on

Transparent,fricLonlesstoeMerchants,increasedconversionrates

NIDSecurity

17

ABOUT NID Security

TheWorldLeaderinDisplayCardManufacturing

AnOTcompany

NIDSecurity AboutNagraIDSecurity

TheWorldLeaderinDisplayCardManufacturing

Dual Interface DCVV, ePaper Display Cards

Before NIDS commercialized the 1st ISO Display Card with bi-stable display

2005

Introduced 1st alpha-numeric card with 12-button keypad

2008 2012

3rd Gen Display Card with ultra-fast LCD

Introduced EMV payment card with information display & new capacitive 12-button keypad

Introduced the VISA Codesure with dot matrix display

4-in-1 Display Card Debit/Credit Paypass/SecureCode

2006 2009 2010 2011

Production ramp-up, delivery of 1M card in 6 months timeframe

2014 20152014

Introduced the 1st dCVV payment card

www.nidsecurity.com