Interac Association Chip readiness program

1
Interac Association Chip readiness program

• Global Platform
• August 21, 2002

2
Coverage

• An introduction to Interac Association
• Business context for the chip initiative
• Objectives
• Scope timeframes
• Draft requirements identified to date
• Approach being considered for technology
  acquisition
• Near term implications

3
Interac A Canadian Success Story

• Resources cooperation national network
  infrastructure
• 124 members
• Two core services
• 1986 - Shared Cash Dispensing (SCD)
• 1992 - Interac Direct Payment (IDP)
• 325,000 Merchants
• with over 460,000 POS terminals
• 35,000 ABMs
• In 2001, Interac Direct Payment logged 2.2
  billion transactions, a 1000 increase since it
  was nationally available in 1994.

4
INTERAC Services Have Canada Leading the World
ABM Use
EFT/POS Use
Transactions per Inhabitant Source Bank for
International Settlement
(end of 1999)
5
Business context for the chip initiative

• The Canadian Chip Migration Project (CCMP) has
  been underway for 18 months, and is intended to
  enable the successful delivery of EMV-based chip
  payments infrastructure within Canada
• To properly support CCMP the Association is
  defining the common business rules and
  infrastructure requirements needed to implement
  Interac Shared Services on chip
• Chip specifications from the previous chip
  program (IMVCCP) are no longer current and need
  updating

6
Objectives

• The objective of the chip program is to make
  Interac chip-ready on paper if/when a Member
  decides it would like to move to chip.
• Deliverables will include
• Business requirements
• Operating rules and regulations
• Project plans for changes to the Inter-Member
  Network
• Project plans for the implementation of a
  Certification Authority
• Plans for the implementation of a chip
  certification process
• Test plans.

7
Objectives

• Deliverables will not include
• Development of plans for trials and roll-out
• Implementation of changes to Inter-Member Network
  to accommodate chip
• Implementation of a certification process
• Implementation of a Certification Authority

8
Scope timeframes

• Scope includes
• Creation of technical specifications covering the
  Interac Shared Services
• Stakeholder communications strategy
• Opportunities to leverage, where feasible, the
  chip technologies developed by other card
  associations
• Timeframe
• Chip ready on paper by mid-late 2003
• Implementation decision is separate and involves
  commitment of resources.

9
Draft requirements identified to date

• Basic requirement
• Replicate existing service functionality
  ( requires a multi-application chip
  card in order to address both domestic and
  international utility)
• Possible Enhanced features to be included in the
  specification
• Provide cardholders with access to multiple
  accounts, and customize account availability for
  each Interac service
• For off-line operations, differentiate risk
  parameters by account, by Interac service or
  share parameters where it makes sense to do so
• Candidate lists presented for selection should be
  tailored to the specific circumstances of each
  cardholder
• Position Members to offer multi-application
  (credit/debit) cards, should they so wish

10
Approach being considered for chip technology

• Interac Associations intention is to leverage
  existing chip infrastructures to the extent
  possible
• reduce cost complexity
• shorten development time frames
• minimize technology risk
• Preliminary discussions already held with Visa,
  MasterCard, and AMEX, . and with the major card
  manufacturers

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Leveraging existing chip technology - evaluation
criteria

• What options are available, and how effective are
  they
• What are the operational implications (risk,
  branding, cost, )
• What are the rules and conditions to be imposed
• Do any of the options present opportunity to
  enhance existing services

12
Leveraging existing chip technology - ideal
capabilities

• For debit cards
• use the application, the data structures, and any
  expected data values
• use selected parts of the application, but allow
  for additional Interac specific processing
  routines, data structures, and data values, if
  required
• For multi-application cards
• use common application, common data structures,
  common data values
• share particular aspects of the application, and
  perhaps some of its data, but utilise also
  Interac specific data and processing routines, if
  required

13
Leveraging existing technologies -
preliminary conclusions

• Basic requirements seem able to be met using
  existing masks (M-Chip, VSDC)
• Enhanced features require either multiple
  instances of the application to be replicated
  within EEPROM, or development of an
  Interac-specific mask

14
Near term implications of this approach