The Ever Changing Payments Landscape: EMV & Mobile Payments (Conference Presentation Slides) |...

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

2

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?

3

National Association of Federal Credit Unions l www.nafcu.org

The What

4

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

5

National Association of Federal Credit Unions l www.nafcu.org

EMV

6

Foundation for Next Generation of Payments

National Association of Federal Credit Unions l www.nafcu.org

EMV: A Global Reality

7

National Association of Federal Credit Unions l www.nafcu.org

EMV: Changing Cardholder Behavior

8

National Association of Federal Credit Unions l www.nafcu.org

EMV: Building a Card Application

9

National Association of Federal Credit Unions l www.nafcu.org

EMV: Choosing an Interface

10

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

11

National Association of Federal Credit Unions l www.nafcu.org

The NFC Ecosystem…Who Pays?

12

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

13

National Association of Federal Credit Unions l www.nafcu.org

Let’s Talk Mobile

14

National Association of Federal Credit Unions l www.nafcu.org

Mobile Payments: The Reality

15

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

16

National Association of Federal Credit Unions l www.nafcu.org

The Why

17

National Association of Federal Credit Unions l www.nafcu.org

EMV: Why Now?

18

National Association of Federal Credit Unions l www.nafcu.org

EMV: Travelers & Denial of Service

19

National Association of Federal Credit Unions l www.nafcu.org

Fraud Trends in Canada

2008 – 2010

Holiday Spikes

No Holiday Spike

Rapid Fraud Decline

20

National Association of Federal Credit Unions l www.nafcu.org

Fraud Trends in US

Significant Cross

Border Fraud

Growth in the US

21

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

22

National Association of Federal Credit Unions l www.nafcu.org

Consumers want a

simpler shopping journey

23

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

24

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

25

Strategic Considerations

National Association of Federal Credit Unions l www.nafcu.org

26

Mobile Payments – Market Makers

26

National Association of Federal Credit Unions l www.nafcu.org

The EMV Payoff

27

National Association of Federal Credit Unions l www.nafcu.org

The How

28

National Association of Federal Credit Unions l www.nafcu.org

Enterprise Impact of EMV

29

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

30

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

31

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

32

National Association of Federal Credit Unions l www.nafcu.org

Thank You

Dean Seifert

SVP – Product Development & Innovation

dean.seifert@vantiv.com

(720) 295 0110

@deanseifert