Strategy Smart Card Business by fwq23989

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									MasterCard Smart Card Strategy for
           Asia Pacific
            Taipei Business Seminar
                12 February 2004
              Richard Fletcher, SVP
    MasterCard International e-Business Group
                            Agenda

Commitment to Smart Cards
    Traditional drivers
    New drivers
OneSmart
Some examples of emerging
solutions
       Authentication,
       Data storage,
       Contactless.
MasterCard Implementation
Services
Member Chip Migration Activity
Role of Global Platform

                                     2
               Commitment to Smart Cards
MasterCard is firmly committed to smart cards as
next generation platform for its payment products
Smart cards support business objectives
    Maintain profitability
       Reduce fraud, communication and operational cost
    Leverage growth opportunities
       Address new merchant categories and cardholder
       segments
       Address concerns regarding e-commerce
    Strengthen cardholder relationship
       Increase product appeal by leveraging multi-application
       capabilities
    Advantage MasterCard brand                                   3
                        Traditional Drivers for EMV
                       Reductions in fraud and processing costs
MasterCard has been supporting members by:
 Establishing a smart card     MF
                                    500                                                                                         0.2 %
 payment infrastructure
                                    450
 Providing a smart card             400
 payment application                                                                France 1989 - 1999                          0.15
                                    350
 (M/Chip) based on global                 0.125
                                                  0.118

 standards                          300
                                    250                   0.087                                                                 0.1
 Defining policies / rules
                                    200
                                                                  0.055
 Executing regional /               150
 country migration plans                                                  0.037
                                                                                  0.032
                                                                                                                                0.05
                                    100                                                   0.028 0.023
                                                                                                        0.02   0.019 0.02
                                    50
                                          445 467 472 375 183 165 160 146 123 142 178                                           0
                                     0
                                           89      90      91      92       93     94      95    96     97      98   99
                                                    Source: MasterCard Analysis, Gemplus, Cartes Bancaires
                                                                                                                            4
                 New Drivers for Chip

Growth
Members can create innovative value propositions, new card
programs and further penetrate target market segments



Customer Relationship
Management
Opportunity for more rewarding, more personalized card
offerings to enhance customer relationship management
Many banks see chip as a key opportunity for boosting
customer acquisition, usage and retention

                                                             5
                           OneSMART™
‘Ready to go’ approach for banks
Deliver off-the-shelf, end-to-end Chip solutions
based on market needs
‘ A la Carte’,                       ‘ Menu’,
 Credit/debit (M/Chip 4)        Packaged solutions addressing clear
 M/Chip Pre-Authorized          needs and segments

 Authentication
                                OneSmart Web
 Personal data (MODS)
                                OneSmart Authentication
 Stored Value (Mondex)
                                OneSmart Payment
 PayPassTM
 Loyalty, e-Ticketing /
 Couponing                                                     6
                        OneSMART™ Packages



    OneSMART MasterCard PAYMENT

MasterCard M/Chip:
The latest version of
our EMV compliant
credit/debit
application




                                             7
                        OneSMART™ Packages



    OneSMART MasterCard AUTHENTICATION

MasterCard M/Chip:        MasterCard Chip
The latest version of     Authentication
our EMV compliant         Program:
credit/debit              Ensures
application               a higher level of
                          security for on-line
                          shopping and remote
                          banking

                                                 8
                        OneSMART™ Packages



    OneSMART MasterCard WEB

MasterCard M/Chip:        MasterCard Chip        MasterCard Open Data
The latest version of     Authentication         Storage:
our EMV compliant         Program:               Market driven
credit/debit              Ensures                application that lets
application               a higher level of      cardholders securely
                          security for on-line   store and manage a
                          shopping and remote    wide range of personal
                          banking                data on the smart chip

                                                                    9
     MasterCard Chip Authentication Program
Fit with E-Commerce and M-Commerce

  Addresses two main barriers to
  online commerce:
      Consumer concerns about security
      Fraud losses due to “card not present”
      transactions
  The solution:
     M/Chip card and PIN used in (un)connected
     smart card reader to authenticate card and
     verify cardholder
     Offers ability to bridge the virtual
     and physical worlds
     Provides authentication for
     multiple other services                      10
  MasterCard Open Data Storage (MODS)
MODS is an application program
interface (API) specification
Allows cardholders to store information
on their cards
    Consumer’s own information
    Merchant (third party) information
Developed from:
    Consumer research into wants and needs
    Global privacy guidelines, sensitive yet
    functional
The specification fosters:
   Interoperability for vendors, merchants,
   issuers
   Multiple device utility for consumers
                                                11
   Quicker development cycles for all parties
                Contactless Payments

PayPassTM - the easier way to pay
  Simpler & easier than cash

  Ideal for cash-only environments - speed essential

  Consumer feeling of security - no card hand-over

  Enhances MasterCard payment card

  Minimal changes to card processing
  infrastructure - Operates over
  MasterCard's existing networks
                                                       12
MasterCard Chip Implementation Services / Support / Activity

Card and Terminal Testing
Chip implementation support
Network, host, perso validation
Licensing of reference applications on MULTOS –
M/Chip 4, MODS, Mondex
Provision of Key Management Services for MULTOS
Issuers
Standards development – Global Platform, MAOSCO,
EMVCo, SCSUG, Common Perso

                                                               13
Asia-Pacific: Chip Deployment Outlook
      120

      100

       80

       60                                         EMV Cards
                                                  (Millions)
       40

       20

        0
            2002   2003   2004   2005   2006

Realistic expectation to issue over 100M EMV cards in the next 4/5
years                                                            14
                 Asia Pacific MasterCard Chip Deployments to date
                                                                         Japan
Card Type Countries   Issuers    Volume      Apps                        Pocket Card
                                                                         Daiei OMC
Native       8           20+     8m       M/Chip Lite                    Takefuji
JavaCard     0           0       0        N/A                            UC Card
MULTOS       6           30+     12m      M/Chip Select, MODS, Mondex,   Sanwa
                                          Loyalty, Health, PKI, ID etc   JIPS
                                                                         Other MCI
                 Taiwan
                 Cosmos Bank
                 Taipei Bank
                 Hsin Chu
                 Int Comm Bank of China
                 Int Bank of Taipei                                                    Philippines
                 Fubon                                                                 Schools
                 NCC
                      South Korea
                      Kookmin Credit                                                   Malaysia
                      LG Credit                       Hong Kong                        Bank Islam
                      Samsung Credit                  HSBC                             Southern Bank
                      BC Card                                                          HSBC
                      Cho Hung                                                         Public Bank
                      KTF                                                              Alliance Bank
                      Virtual MD
                      Hyundai Card
New Business Opportunities
         • E.g. Hong Kong SAR National
           ID card
         • Hong Kong Immigration issuing
           7 million citizens with MULTOS
           smart card equipped with PKI,
           Biometrics, value added apps
         • MasterCard supplies MULTOS
           Key Management Authority
           Solution package to
           Governments deploying National
           Identity Card Schemes based on
           MULTOS
                                       16
           MasterCard’s Role in Global Platform
 GlobalPlatform’s aim is to deliver a complete set
                                                       MasterCard activity in GP
           of smart card specifications
   for an end to end smart card infrastructure.           Ensure best practices of
                                                          alternative mass
Card Specification (w.r.t.                                deployed open standard
application loading and deleting)                         card technologies e.g.
Card Compliance Program                                   MULTOS are
Card Security Requirements Spec.                          encapsulated within GP
                                                          standards
                                              CARDS

Device API Specification                                  Support definition of
Device Application Provisioning                           device standards

                                             DEVICES
Smart Card Management Systems
                                                              Support definition of
Requirements
                                                              Systems standards
Profile Specification
Scripting Specification        SYSTEMS INFRASTRUCTURE
Load & Personalization Spec.
Key Management System Requirements                                         17
                   Thankyou

Richard Fletcher, SVP
MasterCard e-Business Group
47-53 Cannon Street
London EC4M 5SH
UK
Tel: +44 20 7557 5000
Email: richard_fletcher@mastercard.com


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