Post on 01-May-2018
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Sydney Technology and Innovation for Banking and Financial Services Conference
23 October 2007Chris Hamilton, CEO, APCA
������� �� � �� ��� ������ �������Australian chip payment cards:
where are we up to?
The overseas chip card experience:
what can we learn?
The industry agenda:
what do we need to do?
� �� ��� ��������• Chip is a paradigm shift: new costs, risks
and opportunities
• Chip is the basis for all future evolution
• The card rules the terminal
• Massive convergence opportunity and risk: transport, micropayments, loyalty.
• Lots of blue sky, but the usual short term implementation pressures
�������������� ����������� ��� �� ��
ATMs 24,000
EFTPOS terminals 540,000
Debit payment cards 21,000,000
Credit and multifunction cards 22,000,000
� �� ��� � ��� � ��� ��� ����
• Successful, reliable, robust & secure.
• Card fraud low by world comparison –(credit 36.9 cents per $1,000, debit 7.7 cents)
• Fraud heading our way?
������ ����� ���� ��!• Many countries “fully chip” (local card, local
terminal)
• Many others migrating
• Chip & magnetic stripe (overseas use)
• Driver = fraud (chip addresses counterfeit), telecom costs (chip allows offline verification)
• Use of magnetic stripe being blocked domestically for domestic cards
• Counterfeit fraud migrating to non-chip areas
� �� ��� � ������• Chip payment credit cards being issued
• EFTPOS terminals being upgraded to accept Chip
• ATM’s - no action yet
• Driver = Card Scheme incentives & liability shift
• Rolling implementation, not big-bang
• Impact on consumers & merchants
• Overseas Chip cards being presented
• Travelling Australians starting to have problems
" # ��� ��������Originally chip & signature, then chip and PIN;
122m cards, 850,000 POS terminals, 40,000 ATMs
Things that worked: industry-wide, central coordination; central testing facilities; large marketing and comms effort (retail staff aspect vital); central data and issues logs
Things that didn’t work: very expensive; started with low-level technology then upgraded; stopped central testing too early, underestimated media adverse “spin”
�� �� ! �� ��$ ���� ��A closer comparison with Australia in terms of size and
complexity, BUT: proximity to US (fraud leakage), and strong domestic card network: Interac
Avoided “big” central infrastructure, But: focus on town trials and retailer engagement, with clear long-term deadlines: ATM mandatory end 2012, POS mandatory end 2015.
So far, so good.
Need for industry collaboration?
• Overseas experience:– Interoperability issues– Industry approach
• APCA Forum:– Agreement that industry collaboration is a
necessary part of successful chip rollout in Australia
• Engage with all stakeholders (card schemes, merchants, FI’s)
• Identify areas requiring collaboration
%����� �����! �&' ��(�������)
Potentialcrisistrigger
• Obviousdisruption
• Memberreport
Initialassessment(Declare a crisis or not)
• Analyseinformation
• Request moreinformation
Invoke crisiscommunicationplan – managethe crisis
• Majordisruptionor event
Declare thecrisis as over
• Agree the crisis is over
Possible areas for collaboration
* � ! &� � �
Agree industry minimum standards and debit specification
• Account selection• Online/offline PIN
authorisation• EMV specification
interpretation• SDA/DDA• Risk parameters• PIN bypass• Plain text vs encrypted PIN
Industry timeframes
Education
Industry testing capability
• Customer• Merchant
Problem resolution / information sharing
Communications
Publicrelations
• Consumers
• All stakeholders
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We need to implement EMV for tomorrow, not just today:
• Loyalty, healthcare, ticketing, mass transit etc. etc.
• Contactless, mobile phones and PDAs.
• Secure payment services via personal computers, interactive TV, etc.
• Build for future volumes!
+ �(� ������� ����The historical segregation of cards and payments is
breaking down
• Real-time payment assurance
• Mass-market reach
• Increasing importance of online business
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Changing consumer demand: Will we be ready?