EVC PRELAM® Introduction to Battery-Less Dynamic Security Code Solutions

EVC PRELAM® Introduction to Battery-less Dynamic Security Code Solutions

Retailers report increased fraud incidents despite EMV “The introduction of chip … cards continues to move fraud to the online channel.” — LexisNexis, “The True Cost of Fraud”

Global EMV adoption Explosive growth of eCommerce

Sales in trillion USD Fraud migrates to path of Statista, March 2018 least resistance True Cost of Fraud to Merchants

The cost for each dollar of fraud losses in 2019 is $3.13 per $1 up 6.5% from 2018, crossing the $3 market with of direct fraud expenses related to chargebacks, fees, Up 6.5% from 20181 merchandise redistribution, labor/investigation, legal prosecution and IT/software security.

1. Lexis Nexis, True cost of fraud retail study (July 2019) Timeline Anatomy of CNP Fraud 15+ DAYS Average time before stolen card information is used fraudulently

DARKNET

Day 1 Stolen card info Day 15+ Card info stolen collection & distribution Fraudulent card use

Collection networks, U.S. credit card data are traded Stolen card data is used at least 15 restaurants, bar, mail order, between $7-$10, and between $25-$45 days after collection to make it telephone order, when card is with track data or full cardholder harder to trace back and reduce the handed out… information risk of compromising the point of collection(POC). What is a False Decline?

False Declines or false positives occur when good transactions are wrongly rejected due to overcompensation of antifraud systems.

As a result, cardholders often elect to abandon a purchase, seek a different store, use an alternative payment card, or payment method. The State of False Declines vs eCommerce Fraud

False declines eCommerce Fraud USA Worldwide2 USA vs

$25B-$40B $6.4B Est. value of $331B CNP fraud in 20183 Est. value of falsely declined CNP transactions in 20181

1. Merchant Fraud Journal referencing Aite Group - Chargebacks and False Declines: Cards’ Ugly Underbelly , 2. Accenture, The scope of the Card Not Present Problem 3. Creditcards.com, Credit Card fraud and ID Theft statistics Long Term Effects of False Declines

$361.98

$159.3

Approved Declined customers customers Average Average per spending order Declined card relegated to Card abandonment or the Reduction in lifetime back of the wallet change payment method 1 post decline value

1 Source: Radial, False Positives White Paper, The monster that’s really killing you and how to survive Trust in Antifraud Solutions Dynamic Card Security Code is the right balance between convenience and security Dynamic Card Security Code

Mature solution available from all card manufacturers

Protecting card information at the source by changing the security code directly on the card and displaying it for a period of time on a built-in mini-screen. Card-powered by any Standard Reader

Battery-free card

Card display showing security code updated during EMV transactions Battery-free Technology The 3-digit security number on the card changes during every Card Present EMV transaction

• No additional requirements for personalization, leverages personalization of chips with Ellipse Ready applications

• Standard credit card format and thickness (ISO 7810 & ISO 10373)

• Powered by any EMV reader (POS & ATM)

• EVC remains displayed until the next payment

• Compatible with all standard card features (Embossing, Magstripe, Hologram…)

Battery-free Long service Hot-lamination More No more CNP Frictionless life manufacturing Eco-friendly card reissuing fraud prevention experience EVC Technology Benefits

EVC cards obtain their power by leveraging Eliminates card replacements and reduces existing POS terminals and ATMs. A new costs related to fraud management. Eliminates security code is calculated and displayed loss of opportunity and avoids substitution of during each card present transaction. Battery-free No more cards on field while cardholders wait for their card reissuing replacement cards.

Innovative battery-free design ensures operation during the entire lifetime of the EVC replaces the static 3 or 4-digit card security card, and eliminates self-discharge, number by a dynamic code, which effectively protects Long providing virtually unlimited shelf life. against card information theft. EVC provides an service life additional layer of security for CNP transactions and CNP card-on-file enrollment. fraud prevention • Tokenizes the card security code • Protects at the source • Protects wallet enrollment EVC cards are produced by employing • Protects payment information updates existing hot lamination process and equipment, similar to dual interface card manufacturing. EVC cards can Hot-lamination accommodate any standard card features Frictionless experience for end users, immediate manufacturing such as embossing, signature panel, and acceptance, and transparent for eMerchants. hologram. Frictionless Works on any device and any channel; no experience plugins or special app required.

Battery-free design eliminates related risks, reduces environmental footprint, simplifies More end-of-life product disposal and recycling. Eco-friendly EVC Generation/Verification EVC Generation Contact and contactless modes Card generates a new EVC during every EMV transaction. The process is transparent to the cardholder

EMV transaction

EVC Verification Card Not Present transaction

Current Record Submitted Result

f(card data) = 625 625 OK EVC: 625 f(card data) = 301 301 OK f(card data) = 472 258 KO Submitted EVC will be compared with … issuer/processor calculated EVC EVC Verification • EVC is an issuer-only solution that is transparent for the cardholder, has minimal infrastructure impact for the acquirer processor, and the network.

• EVC can be easily deployed by enabling existing payment HSMs.

• Issuer generated/originated card security value improves trust and reliability for risk scoring

Browser Existing payment HSM

NETWORK ISSUER ACQUIRER Issuer PROCESSOR PROCESSOR MOTO

Infrastructure Leverages existing No change No change No change No change modification EMV HSM Manufacturing Standard processes: Hot lamination Punching Milling & embedding Full Supply Chain Same existing Dual Interface payment card supply chain

Card Manufacturers Flexible Printed Prelaminated Issuer Card Circuits Inlays Processors Issuers EMV Module Cards Embedding

Chip agnostic

Standard Manufacturing Process PRELAM® Specification

OPERATING FREQUENCY 13.56 MHz OPERATING TEMPERATURE -25 °C to +50 °C MATERIAL Outer layers in PVC, coated to aid adhesion during lamination INTERNATIONAL STANDARDS ISO/IEC 7816, ISO/IEC 14443 APPLICATION AREA Dual-interface Payment, 3-digit Electronic Verification Code DIMENSIONS Customer specific NOMINAL THICKNESS 500 µm, tolerance: +30µm/-10µm AVAILABLE IC • Infineon SLC 32PD • NXP P71 • Other Secure Element IC’s on request Example Finished Card

Long Standard More service life Hot-lamination Eco-friendly

Dimensions: ISO 7810 Dual Interface: YES EMV: Chip agnostic CVV/CVC: Electronic Antenna: Linxens Display: Electronic paper; 3-digit, 7 segments Display Location: Rear Magnetic Stripe: 2 or 3 tracks Signature panel: YES, Secure option Hologram: YES Printing: Full CMYK, glossy, matte, metallic Physical perso: Embossing, laser, indent Summary Simultaneously addresses the needs of issuers, merchants, and end-users Convenience & peace of mind Cost reduction • No card re-issuance Easy deployment, • Lower fraud management cost 100% adoption • Reduced loss of opportunity • Easy to use, frictionless & transparent to cardholders • Zero impact on e-merchants • Works on any device & any channel, no plugins required More secure • Tokenizes card security code • Protects at the source • Protects wallet enrollment Battery-free • Reliable lifetime performance • More eco-friendly • Compatible with all card manufacturers hot lamination process Expand revenue • more CNP interchange revenue • Top of wallet Differentiation • Recruit new customers, increase • Most advanced and complete payment market share Easy implementation card • Increase client approval rate • Issuer-only solution • Improve cardholder confidence • Using existing HSM • Cloud or on-premises platform For design-in process & sample requests, please get in touch with us here.