01

The cards have magnetic-stripes, why now cards with chips?

The reason for adding a chip on the cards is in particular to prevent fraud and thereby reduce the costs. Because of the fact that using a chip much more data can be stored on the card, more functionalities can be realised. This means concretely, that new business areas and new products based on the chip technology can be established in the market. The magnetic stripe and the embossing will be part of the cards in future, so that the paying of corporate customers who don't have an EMV-compliant terminal can be conducted trouble-free.

02

What does EMV stand for?

EMV is the abbreviation for Europay-MasterCard-Visa. The EMV standard specifies chip cards and the associated infrastructure like terminals and card readers. Due to the rapid evolution of chip card technology and the corresponding applications such as credit card and debit card payments, electronic purses and digital signatures, there is a strong demand for a common standard unifying all these functionalities on a technological base.

03

As an issuer, do I have to issue credit cards with chips?

From January, 1st, 2005 there will be a liability shift in Europe. The risk with regard to fraudulent transactions will be shifted to the one who doesn't support the chip functionality. This means in particular, that the corporate customers, whose terminals support the chip cards, shift the liability to the card issuers, if they haven't integrated chips on their cards. Contrary, the corporate customer bears the risk if the credit cards are already equipped with a chip but his terminals don't support this functionality.

04

Which chip should be integrated?

There are several kinds of chips which in particular are different in functional range and thereby in the price. Which chip fits best for which issuer, depends considerably on the product positioning. The answer thereby depends on the card issuer's product strategy and under any circumstances shouldn't be given because of technical facts.

05

When is the best time to start an EMV-project?

The decision which is the best time for an EMV-migration of one specific issuer resp. his product should be made on base of concrete, institution-dependent needs and requirements. For this purpose, an analysis of the existing product programs and both a qualifying and quantifying of the inherent risk is required. The EMV-migration of existing card programs serves in particular the reduction of fraud and the limit of existent creditworthiness risks. Only who knows the risk of the individual product array can define the ideal time for the own institution in an adequate way. In case the risks for an institution, in particular as a result of the liability shift in January 2005, are not identified yet, an institute-specific analysis should be initiated immediately. The results of this analysis together with the institutional card strategy will visualise the actual needs for an EMV-migration project.

06

Who can support me with my EMV-project?

The company NOVOSEC offers consulting services from the requirements and risk analysis to the support of concrete migration projects (see project approach EMV). We would like to arrange a meeting with you in which we can survey your institution-specific questions and needs. Based on these, an activity plan can be established afterwards.

07

Which functionality can be integrated in the chip?

Beside the classical payment functionality (credit, debit, purse), the chip offers a variety of basis functionalities which can be combined at the product definition to a customer-specific offer. The essential basis functionalities are: identification and authentication (e.g. TAN-generator, electronic signature), market place applications (e.g. ticketing), electronic purse (e.g. GeldKarte).

08

Which consequence has an EMV-migration for card production and processing?

Because of the fact that the chip contains cardholder-specific data, organisational and technical changes with regard to the card issuing are required. In addition to this, there are enhanced requirements for an authorisation system at chip based payment transaction.