ATM Operators and Interna onal Transac ons A Path To A Be er Interna onal Cardholder Experience
Ron Schni man, Senior Vice President, ATM Channel & Retail Distribu on
Smart Card Alliance – 2104 Payment Summit, Salt Lake City February 5 - 7
The opinions expressed by Mr. Schni man are his own and do not necessarily represent the views of Bank of America EMV – A Path To A Be er Interna onal Cardholder Experience
Why are interna onal transac ons important to Bank of America? • Bank of America ATMs process a material number of interna onal transac ons rela ve to the total number of non-Bank of America cardholders that use Bank of America ATMs. • Bank of America is a member of the Global ATM Alliance. The Global ATM Alliance members include Barclays Bank, BNP Paribas Bank, Deutsche Bank, Sco a Bank, and WestPac Bank. Each member provides surcharge free access to each others ATMs. Members cardholders seek out the approximately 50,000 Global ATM Alliance ATMs. • Bank of America ATMs can be found in many of the highest US des na on ci es for interna onal travelers . • Interna onal authoriza on rates average between 60% to 70% well under the domes c rate of nearly 90%. This is due to many interna onal issues causing the blocking of transac ons in regions with li le or no EMV authen ca on. EMV – A Path To A Be er Interna onal Cardholder Experience
EMV at the ATM in the U.S., where are we? • In September 2011, MasterCard announced a shi in liability for cross boarder Maestro transac ons effec ve April 19th 2013. • Domes c shi in liability is in 2016 for MasterCard and 2017 for VISA • A majority of ATMs see li le to no Interregional Maestro ac vity and would probably not see a major impact to their business. • The remaining ATMs could see material shi s in liabili es without mi ga on. • MasterCard rolled out Fraud Rule Manager to assist ATM owners in mi ga ng the shi in liability losses. EMV – A Path To A Be er Interna onal Cardholder Experience
EMV at the ATM in the U.S., where are we con nued? • Most major ATM deployers have developed plans to implement authen ca on of EMV transac ons which include upgrades to hardware and so ware. • A small percentage of ATMs have begun to authen cate EMV. • A material number of ATMs are expected to authen cate with EMV in 2014. • ATM industry is collabora ng via the EMV Migra on Forum’s ATM Working Commi ee to develop a white paper to assist ATM owners in understanding what it takes to implement EMV at the ATM. • White paper is expected to be published by the end of April,2014. The working commi ee consists of ATM owners, manufacturers of ATMs and encryp on hardware, front end and tes ng so ware providers, payment networks, processors, and industry associa ons.
EMV – A Path To A Be er Interna onal Cardholder Experience
Why implement EMV now? • Improve the interna onal cardholder experience • Drive the interna onal card authoriza on rate from the 60%-70% towards the nearly 90% domes c rate • Early adopters will benefit from issuers driving cardholders to EMV capable devices. • Mi gate the shi in liability losses • Best way to mi gate is to implement EMV • Other op ons require blocking poten ally good transac ons, which can cause customer confusion • Fraud Rule Manager is a tool to mi gate as migra on to EMV is developed EMV – A Path To A Be er Interna onal Cardholder Experience
Why implement EMV now con nued? • Mul genera onal planning • Most ATM owners take a mul genera onal planning approach to implemen ng new hardware and so ware at the ATM. It takes years to plan, code, and rollout solu ons. • Hardware upgrades are par cularly challenging. The sooner you start to get the hardware out the be er off you are. You can roll hardware out ahead of so ware. • Refresh cycles for an ATM are typically 6-10 years. If you didn’t begin installing EMV card readers to your ATMs 6 years ago, you will likely need to update your card readers ahead of your normal schedule of replacement. • Begin the process of understanding the customer experience challenges • It can take years to develop screen flows that avoid card capture and customer confusion EMV – A Path To A Be er Interna onal Cardholder Experience
Why does EMV present customer experience challenges? • Today’s magstripe cardholder experience at an ATM in the U.S. is designed to give the card back immediately to avoid card capture • Motorized Card Reader • Cardholder inserts card , magstripe is read and card is returned immediately • Dip card reader • Card holder inserts and immediately removes, magstripe is read on way out EMV – A Path To A Be er Interna onal Cardholder Experience
Why does EMV present customer experience challenges? • Once EMV is implemented, card can not be returned immediately, card must be held un l the chip is read and auth is completed. • Motorized Card Reader • Must find an opportunity within the screen flow to return the card before the customer walks away • Dip card Reader. • As many as half the ATMs in U.S. are dip card readers. • Dip card reader implementa ons require the card to be clamped down and released when appropriate. • During migra on, ATM Owners implement “double dip” solu on • EMV card is inserted and removed from Dip Card reader • Magstripe is read to determine if the card has EMV capability • EMV card holders are then asked to reinsert their card EMV – A Path To A Be er Interna onal Cardholder Experience
Other considera ons • Contactless • ATM owners all need to consider contactless as they look to upgrade or replace their hardware. • No clear direc on as to what the standard will be. NFC, contactless EMV… As the card strategy goes, so goes the ATM • EMV Migra on Forum ATM Working Commi ee is not in a posi on to drive this decision. It is focused on collabora ng to make EMV migra on as smooth as possible for the consumer and for ATM owners. EMV – A Path To A Be er Interna onal Cardholder Experience
Other considera ons con nued • Change PIN at ATM • ATM would be a good channel to consider implemen ng changing off line PIN. • U.K. and other countries implemented change PIN across all ATMs at the me of migra on. • Today, many FIs provide cardholders online Change PIN func onality at the ATM. U lizing ATM to update offline PIN and synching it with on-line at the ATM would be an opportunity to move the service from banking centers to ATM. • Further expanding Change PIN to allow cross payment network ability would also benefit issuers that implement EMV cards with offline PIN capabili es. • EMV Migra on Forum ATM Working commi ee has been working to educate ATM owners and issuers on what it would take to implement change PIN.