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EMV Chip Cards, NFC and QR Codes are all new technologies in the payments landscape that can have an impact on financial institutions. With the payments industry continuously growing, credit unions need to think differently about their credit business and how this growing technology can affect their members. Why are these technologies important for my credit union? How can I create opportunities for my business with these technologies? In this recording, you will learn more about how your credit union can adapt to what the future forecast looks like for this growing industry. Learn more at: www.nafcu.org/vantiv
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National Association of Federal Credit Unions l www.nafcu.org
The Ever-Changing Payments Landscape: EMV & Mobile Payments
Presented by
Dean Seifert Senior Vice President
Product Development & Innovation
National Association of Federal Credit Unions l www.nafcu.org
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National Association of Federal Credit Unions l www.nafcu.org
WHY
are these technologies
important to my institution?
HOW
do I position my institution to create opportunity from
these technologies?
WHAT
are all of these new
technologies?
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National Association of Federal Credit Unions l www.nafcu.org
The What
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National Association of Federal Credit Unions l www.nafcu.org
First – Let’s Baseline on Terms
Stands for: Europay, Mastercard Visa
Global standard for the
inter-operation of circuit cards EMV
Stands for: Near-Field Communications
Set of standards for wireless
communications between mobile devices NFC
Stands for: Quick Response Codes
A set of standards for encoding data
in a two-dimensional barcode
QR
Codes
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National Association of Federal Credit Unions l www.nafcu.org
EMV
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Foundation for Next Generation of Payments
National Association of Federal Credit Unions l www.nafcu.org
EMV: A Global Reality
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National Association of Federal Credit Unions l www.nafcu.org
EMV: Changing Cardholder Behavior
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National Association of Federal Credit Unions l www.nafcu.org
EMV: Building a Card Application
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National Association of Federal Credit Unions l www.nafcu.org
EMV: Choosing an Interface
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National Association of Federal Credit Unions l www.nafcu.org
The Timeline: What’s Coming When
VISA MasterCard Discover
April
2013
Acquirers and sub-
processors (Mandate)
Acquirers and sub-
processors (Mandate)
Maestro ATM liability
shift1
Acquirers and sub-
processors (Mandate)
Oct
2013
Merchant Account
Data
Compromise(ADC)
relief (Phase I)
Oct
2015
US Liability Shift1 US Liability Shift2
Merchant ADC Relief
(Phase II)
US Liability Shift
Oct
2017
Automated Fuel
Dispenser (AFD)
Liability Shift1
AFD Liability Shift2 AFD Liability Shift
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National Association of Federal Credit Unions l www.nafcu.org
The NFC Ecosystem…Who Pays?
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National Association of Federal Credit Unions l www.nafcu.org
QR Codes: Coming to a
Shopping Experience Near You
Pay Online Ecommerce
Pay Bills
Retail / In-Store Restaurant Print Ads
ATM / Cash Access
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National Association of Federal Credit Unions l www.nafcu.org
Let’s Talk Mobile
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National Association of Federal Credit Unions l www.nafcu.org
Mobile Payments: The Reality
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National Association of Federal Credit Unions l www.nafcu.org
What We Hear from FIs and Retailers
• FI’s and Retailers don’t want another brand between them and
their customers
• New intermediaries in proposed NFC-based ecosystems make
the business model nonviable
• Solutions that require new phones and new POS hardware will
take many years to reach critical mass
• Winning solutions will need to overcome the real and perceived
security and data ownership issues
• Monetizing consumer payment transactions via time & location
sensitive ads & offers is the big prize
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National Association of Federal Credit Unions l www.nafcu.org
The Why
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National Association of Federal Credit Unions l www.nafcu.org
EMV: Why Now?
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National Association of Federal Credit Unions l www.nafcu.org
EMV: Travelers & Denial of Service
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National Association of Federal Credit Unions l www.nafcu.org
Fraud Trends in Canada
2008 – 2010
Holiday Spikes
No Holiday Spike
Rapid Fraud Decline
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National Association of Federal Credit Unions l www.nafcu.org
Fraud Trends in US
Significant Cross
Border Fraud
Growth in the US
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National Association of Federal Credit Unions l www.nafcu.org
EMV: Fraudsters Target the US
• The US…
• Accounts for 47% of global card fraud
• Generates 27% of total card volume
• Global average fraud rate is 4.5 bps
• The US should be in the 10 bps range…
and the majority is domestic fraud
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National Association of Federal Credit Unions l www.nafcu.org
Consumers want a
simpler shopping journey
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National Association of Federal Credit Unions l www.nafcu.org
• What did I get?
• If I don’t have it
now, when it is
coming?
• What benefits can I
expect now + in
future?
• Where can I
pay?
• How can I pay?
• What’s my
preference?
Pre Purchase Post
• What is out
there?
• Where can I
find it?
• Who will give
me value?
Pay
Solutions to Shop…Not Just Pay
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National Association of Federal Credit Unions l www.nafcu.org
Mobile Payments
• Standards vs. entrepreneurs
• Battle for the NFC Secure Element
• NFC vs. Cloud
• Next Generation POS Systems
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Strategic Considerations
National Association of Federal Credit Unions l www.nafcu.org
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Mobile Payments – Market Makers
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National Association of Federal Credit Unions l www.nafcu.org
The EMV Payoff
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National Association of Federal Credit Unions l www.nafcu.org
The How
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National Association of Federal Credit Unions l www.nafcu.org
Enterprise Impact of EMV
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National Association of Federal Credit Unions l www.nafcu.org
Traits of a Winning Payment System
Reliability
Security
Ease of use
Wallet functionality
Acceptance
Device availability
Beyond the Payment
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National Association of Federal Credit Unions l www.nafcu.org
Next Generation Payments
Assign an Expert
Get to know your Processing Partners
Don’t be afraid to ask for help
Know your company’s limits
Upgrade your cards “naturally”
10.
9.
8.
7.
6.
Top 10 To Do List
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National Association of Federal Credit Unions l www.nafcu.org
Next Generation Payments
Build a Traveler program
Ask the hard question
Place bets - more than 1!
Be consistent with your Brand
Remember your Members
5.
4.
3.
2.
1.
Top 10 To Do List
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National Association of Federal Credit Unions l www.nafcu.org
Thank You
Dean Seifert
SVP – Product Development & Innovation
(720) 295 0110
@deanseifert