Spotlight on Contactless

Spotlight on Contactless

Ryan Altern

Product Marketing Manager EMEA

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Agenda

• Introduction to Contactless

• Contactless Payment

• State of Rollout

• VeriFone Contactless Strategy

• Product Roadmap

• NFC

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Introduction to Contactless

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Short Range RF Technology

Interaction between two devices, based on RF induction, to exchange data

Main characteristics:

• Short range interaction (from a few centimeters up to a few meters)

• Suitable for transmission of small amount of data

• Interaction generally between an active device (with power source) and a passive device (has no power source of its own, powered by the active device)

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Where is RF Technology is Used?

• Automatic identification of objects or bodies

• A tag containing the coil (antenna) is attached to the object

• Used for: storage control, freight control, anti-theft in shops, animal control

• Generally not secure

RFID

• Used to control entrance by reading the entrant’s card

• Generally not secure

Access Control

• Short range data transfer to distribute information

• Used for: access to content, data exchange (ie. ‘NFC’)

Transfer of Information

Contactless Payment

Is the term ‘RFID’ synonymous to ‘Contactless’ in the payment world? …..NO!

‘Contactless Payment’

is the industry term.

• RFID is associated with non-secure data transfer

• Please Do not refer to Contactless Payment as RFID!

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Contactless Payment

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Definition and Features

Non-cash payment transaction

No physical connection between the consumer payment device

and POS/reader

Using standard payment network infrastructure

• Targeted for small value transactions– Usually the equivalent of up to $25/€15/£10– Targeting cash transactions

• Main benefit: quick transaction– Other conditions for quick transaction:

No PIN and No Signature– Easy to operate, no need to orient card

• Flexible Form Factors:– Contactless smart card– Key Fob– Mobile Device (cellular phone, PDA)

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Market Drivers and Benefits

• Increase card transaction volume and revenue by replacement of cash transactions

• Minimal change to infrastructure

For Card Associations and Issuers

• Fast transaction time, queue shortener

• Greater spend at checkout, no cash shortage

• Less cash handling – less errors and fraud

• Reduced terminal maintenance (higher MTBF)

• Competitive differentiation

For Merchants

• Transaction speed and convenience

• No need to carry cash

• Fraud Reduction through reduced card skimming

For Consumers

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Target Market Segments

• QSR

• Pharmacies & drugstores

• Convenience stores

• Supermarkets

• Deli stores

• Kiosks

• Vending machines

• Sport stadiums

• Parking

• Transit

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Association Contactless Schemes

• Scheme called PayPassSometimes also called OneSmart PayPass

• PayPass MagStripe: MasterCard’s contactless-magstripe application

• PayPass M/Chip: MasterCard’s EMV-like application• Scheme called Visa Contactless

Previously called Visa Wave (remained as Visa AP initiative)

• MSD: Magnetic Stripe Data; Visa’s contactless-magstripe application

• qVSDC: quick Visa Smart Debit/Credit; Visa’s EMV-like application

• Scheme called ExpressPay• Specification differentiates EMV and Non-EMV transactions• EMV specification is a subset of their EMV-chip spec

• Magstripe scheme only• Similar to Visa MSD

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Payment Solution Requirements

Cardholder Indicators

Landing zone:

• Landing zone frame is clearly marked

• Tapping icon in center of landing zone

• Card scheme icons (those the reader is certified for)

LEDs:

• Visa, PayPass and AMEX require 4 single-light (green) LEDs

– Left one lit – ready to accept card, all lit in sequence to indicate card reading

• Visa AP and MC AP adopted a 4 color scheme: Blue – ready to accept card, Yellow – card reading, Green – successful transaction, Red – transaction failed

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Payment Solution Requirements

Cardholder Indicators

Buzzer:

• Audio sequence to indicate card reading

• Failure may also be indicated by a special tone

Display:

• Can be used as an alternative visual indication (4 circles sequentially appear to indicate card reading) instead of LEDs

• Can be used, although not mandatory, to display transaction amount and messages

– Common in EMV-like schemes

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Contactless: State of Rollout

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VeriFone Contactless Strategy

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Contactless Strategy Overview

Step One:OEM with Channel Partner to Market1

2Step Two:Fast-Track to Market with ODM Partnership

3Step Three:Abstract andDe-Risk Revenue

4Step Four:Invest and Develop Intellectual Property

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OEM Channel Partnership1OEM partnership with ViVOtech allows:

1. Immediate increase in available products– QX110 (Peripherals)

– QX110T (Taxi)

– QX110D (Vending & QSR)

2. VeriFone to recognize revenue now– 8,000+ Shipments to date

3. VeriFone part-numbers streamlines shipments– Standard VFI part-numbers (P153)

ViVOtech’s cross licensing agreement ensures that

OEM sales will not prevent us from developing our

own technology or locking our customers into a 3rd

party interface.

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Fast-Track Contactless to Market2ViVOtech has enabled VeriFone to drastically diminishour time to market and develop products in parallel

• Leverage proven firmware & design resources• Sales Account Support & Documentation• Assisted with antenna design• Provided certification guidance• Provided level 1 debugging at ViVOtech labs• Provided technical support and training• Custom firmware (NETS, NCR, McDonalds)

By partnering with ViVOtech, we are able to accelerate the Cultural Transformation & VeriFone’s Core Competency

ODM Agreement / Reference Designs:

• QX120VFI Peripheral

• MX800 SeriesConsumer Facing

• Vx 810 Programmable PIN pad

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Cross Licensing Agreement

Hardware Abstraction3

• Allows VeriFone the option to migrate towards our own technology when we’re ready, meanwhile retaining benefits gained throughout the ViVOtech relationship

• Ability to emulate ViVOtech protocols on future products

Time

Abstract core technology

Insulate customer from technology / firmware

Perpetual, free, irrevocable licensing of ViVOtech’s API

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VeriFone’s Intellectual Property4• Become increasingly self sufficient and self

sustainable by investing into VeriFone’s contactless technologyPINpad 1000SE Contactless (PIN Entry)Mobile Terminal Vx670 Contactless

• Transitioning to VeriFone’s internal contactless technology is plug and play / seamless due to the cross licensing agreement, hardware abstraction, and cDTK API

• Today's contactless application will work with tomorrow’s internal technology, and will work across our entire product line“One Contactless Platform, Many Contactless Solutions”

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Contactless Product Roadmap

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Peripheral PIN Entry Programmable Multimedia Unattended Wireless

Contactless: Product PortfolioF

eatu

res

QX120

Vx 670

PINpad 1000SE

Vx 810

MX800 Series QX720 QSR(Non-EMV)

OP 4100

SIM 700/ Vx 700

QX110

Vx 810 DUET

Vx 610 with

module

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Contactless RoadmapContactless Roadmap

Qx720Contactless

OP4100Contactless

Qx120

Qx-110Family

Vx670Contactless

PP1000SEContactless

Peripheral

Durable \ Outdoor

Field \ Modular

In Development Available

MX CTLSModule

Vx810 CTLS

Integrated

Vx 7xxContactless

MX760Contactless

MX MSRModule

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Peripherals: QX110

• Being positioned for use with Countertops, ECRs, or other devices with processing capability

EMV Contactless Peripheral

Merchant & Consumer LEDs

Customer & Association Branding

EMV Contactless Capable

Various Stands & Mounts

Available Now

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Peripherals: QX120

1. Supports EMV and MSR applications

2. Can be connected to most host devices

3. Product from the leading POS solutions vendor

3 Key USPs:

Merchant & Consumer LEDs and light bar

128 x 64 DisplayHigh Contrast, White Back-Lit

Buzzer

Overlay Branding

Underneath the Landing Zone is the RF Antenna

LED-Backlit Contactless Symbol

Currently in Beta!

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PIN Entry: PP1000SE

• DVT – Mid Aug

• Beta Start Mid Sep

• SR Late Oct

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Features PP1000se compatibility (cabling, stands, applications) Serial connectivity (USB conversion option) Applications

• Paypass Mstripe and Mchip• Visa MSD and qVSDC• Discover and Amex• Visa AP

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Programmable PIN Entry: Vx810

• Program Schedule • DVT Unit availability – July• Beta Start – August \ September• Product Release – September \ October

• IDV Update• Larger form factor and centered antenna for easier customer use• Larger antenna size for increased performance•Similar installation procedure

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Multi-lane: MX8x0

Positioning • ¼ VGA PCI PED certified

• High-end full screen multi-lane retail offering

• High quality display & touch panel with multimedia capability

Key 3 USP • Display quality and multimedia capability

• Cross-platform software compatibility

• Global platform

Status • Released and available today PayPass, Visa payWave, Discover, AMEX

MX860

MX830

MX850

MX870

Versions/ Variants

• MSR Only

• MSR + RFID

• MSR + Smartcard

Available Now

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Unattended: OP 4100

• PCI and EMV compliant

• Designed for locations such as fuel pumps, kiosks and other self-service locations

• Has an encrypted personal identification number pad

• Color-screen shows transaction and marketing information to consumers

• Integrated contactless

• No qVSDC or Visa-WaveAvailable Now

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Portable: Vx 670 Contactless

Positioning • Integrated contactless support in Vx 670

• High-end offering for transit, loyalty, hospitality

Key 3 USP • PCI PED

• Smallest all-in-one form factor

• Takes a great product and addsIntegrated Contactless

Versions/ Variants

• All Contactless schemes

• GPRS, WiFi, Bluetooth

• 6 or 12 MB memory

• USB support

• 40 MM paper-roll support

Status • In development, target availability Q4 ‘08

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Tools - cDTK

cDTK = Contactless Developers Tool Kit

“One Platform,Many Solutions

Portable across allVeriFone platform

Contents include:

Support all majorreader / protocols

All components versioned for easier certification

• a.k.a. ContactlessCommServer

• Vx Contactless DTK

• MX Contactless DTK• NURIT Contactless DTK

• High level API• TMS agenda• Debugger

• Firmware loader• Configuration

• ViVOtech protocols• VFI proprietary• Others may be added as needed

(OTI, Panasonic)

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cTMS = Terminal Management Systems

Tools - cTMS

Turn Infrastructure from Liability into Asset

• Enable remote management of installed units

• Reduce number of field tech touch points & cost

Infrastructure becomes“living and breathing”

• Update units as card associations standards roll

• Keep install base compatible with new cards

• Upgrade install base to support NFC features

Expand existing solution

• VeriCentre 3.x+ being upgraded

• NURIT Control Center 7.X+ being upgraded

Features • Update reader firmware

• Update reader configuration

• Update applications

• Update key/blocks

• Update misc., future

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Near Field Communications

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Near Field Communication

• Initiated and supported by the NFC forum– Established in 2004 – Sony and Phillips(2002)– Includes over 100 members

• Leading mobile communication, semiconductorand consumer electronics companies such as:Microsoft, Nokia, Philips, Sony, TI, NEC and Samsung

• Short-range wireless connectivity between electronic devices for various applications:– Data exchange: smart poster, peer-to-peer– Device activation: garage doors, parking gates, turnstiles– Payment – using the cellular phone as a “wallet with card”

(card emulation), or as a “reader”

• Based on ISO 18092 and ISO 14443 A/B– Compatible with Payment Association contactless schemes

• Multiple NFC mobile phone payment pilots have been announced or are under way in the U.S., Malaysia, China, France, the Netherlands, Germany, and U.K.

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Thank You!

Ryan Altern

Product Marketing Manager EMEA

[email protected]

+44 7775 791 202

Documents

Spotlight on Contactless