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Montreal - 2007/12/17: EMV migration - Banks, are you ready?

Migrating to EMV requires huge investments for financial institutions.  From the impact analysis to the “go-live”, development task forces often have to deal with rigid systems. These teams need to dig into dusty architectures that they studied for the last time before the Y2K curve. However, for some organizations, migrating to EMV is a great opportunity to challenge their legacy systems and to renew their operational switches and/or their authorization host in order to support their new business vision. For others, it is a matter of deploying new codes and fixes. In both cases, banks’ partners are under pressure to deliver a quality system in time and in cost. One of the consequences of this EMV rush is a lake of anticipation in what will be EMV transactional operations. Financial institutions will be impacted at several levels.

Field Issues Management - EMV standard comes with the “interoperability” paradigm. Any EMV cards have to be accepted on any EMV points of interaction on the field according to business rules maintained by the payment associations. This “interoperability” criterion is validated during the certification processes. However, the complexity of the acceptance systems deployed on the field (ATM / POS / iPOS / CAT) leads to many field issues that are difficult to anticipate during the pre-deployment stages. Eventually, acceptance systems may face problems with specific EMV cards profiles.

EMV transactional monitoring - Since cardholders will travel worldwide with their brand new secure EMV cards, it is important for issuing banks to know how such cards behave on the field. Eventually, fraud cases may occur in some regions:  pin-bypass, abusive fallback, partial grade situations. In order to keep an eye on the actual level acceptance, a statistical approach has to be used to monitor EMV transactional operations. Potentially, that same mean may be used to anticipate acceptance issues for acquiring banks.

EMV re-certifications - A payment association such as MasterCard has put in place dynamic certification processes consisting in monitoring their members’ performances in order to improve their global interoperability level. As new field issues occurred, new certification tests cases may be designed to catch related problems at the early stage of the migration project. Consequently, new test cards need to be issued and related tests cases to be run on a yearly basis.

 

Which new operational processes have to be designed to support these new business activities? What has to be put in place by the bank in term of teams and tools? Are you ready for your EMV migration

Montreal - 2007/12/28: North-Armerican POS market: Trends

Whereas market segments such as North-American Tier I and Tier II POS segments become saturated, developing a differentiation strategy is an approach to consider to earning market shares over the competition. POS manufacturers and payment solutions suppliers have to take advantage of the technologies and to embrace latest standards to propose a product participating in improving the payment experience at different levels.

Performance: toward a TCP/IP curve
La rapidité d’exécution d’une transaction électronique est un facteur déterminant puisqu’il est directement lié à l’expérience de paiement du consommateur et au rendement opérationnel du marchand. D’ailleurs, l’émergence de nouveaux moyens de paiement sans contact tels que  American Express « ExpressPay » (https://www.americanexpress.com/expresspay/), MasterCard « PayPass » (www.paypass.com), Visa « Visa Wave » (http://www.visaeurope.com/pressandmedia/factsheets/visacontactless.jsp) démontre un réel intérêt à accélérer le paiement à la caisse. Le protocole TCP/IP répond techniquement à ce besoin. Loin d’être récent, il est déjà adopté par certains acteurs l’industrie du paiement électronique. Mais des études récentes (Frost & Sullivan) démontrent que l’intégration de ce protocole dans les solutions de paiement devrait s’intensifier et proposer des architectures plus performantes d’un point communication et plus ouvertes d’un point de vue intégration.

Security: toward EMV migrations
Following the adoption of the EMV standard in Europe, Asia and Latina-America, North America is the last important B2C trading zone to migrate. Whereas Canada has been smoothly initiating the curve for few months, the United-States is likely the next country to proceed because of potential a shift of the fraud coming from EMV countries.

Functional: toward multi-application products
Finally, a product’s functional level is another differentiating factor. Contrairement à l’EMV, le caractère multi-applicatif d’un TPV traduit un vrai « business case » où le marchand est en mesure de déployer de nouvelles applications en vue de fidéliser sa clientèle. Couponing,  certificat cadeaux, programme fidélité constituent de nouvelles opportunités générant de nouveaux revenus pour les détaillants.

Voilà donc quelques tendances qui devraient orienter de développement d’une nouvelle offre en TPV. Le problème posé est celui de l’élasticité de la demande des tiers I et II. Même si il semble y avoir un certain intérêt pour évoluer vers de nouvelles technologies, quel sera le prix à payer pour pouvoir renouveler le parc de TPV? Il est alors déterminant de penser à des solutions innovantes s’appuyant sur des architectures sécuritaires, performantes et économiques.

 

 

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