Master Card Smart Card Strategy Martyn Cooper Global

Master. Card Smart Card Strategy Martyn Cooper Global Platform Symposium - August 2002 Master. Card International Payment Brands

Master. Card A Global Smart Card Leader At Q 2 2002, 125 million Master. Card -, Maestro -, Mondex -, and Clip -branded cards had been issued worldwide Already 1/10 of total Master. Card card base 98 members in 32 countries Over 50% carried value-added Global Platform Symposium applications 2

Total Number of Banking Smart Cards +59% Source: Celent, October 2001: Smart Cards in US Banking: Is the Chip Hip? Global Platform Symposium 3

Smart Card Migrations EMV Migrating/In Progress EMV Committed/Planned EMV Analyzing Global Platform Symposium 4

Europe 2001/2002 EMV Migrating/In Progress EMV Committed/Planned EMV Analyzing Iceland Finland Norway Sweden Ireland Estonian Latvia Denmark Russia Littuania UK Netherlands Belgium Germany Poland Lux. Czech Rep. France Switzerland Ukraine Austria Hungary Slovenia Croatia Po rtu ga l Italy kia Slova Spain Greece Turkey Israël Indicates few banks / processors implementing EMV, not entire country Global Platform Symposium PROPRIETARY & CONFIDENTIAL 75

Asia Pacific 2001/2002 Jp SKor China Tai. India HK VNam Thai. SL Phil. Mal. Sing. Indonesia Australia EMV Migrating/In Progress EMV Committed/Planned EMV Analyzing NZ Global Platform Symposium 6

Middle East/Africa 2001/2002 Leb. Kuw. Egypt SAr. Gha. Nga. Moz. EMV Migrating/In Progress EMV Committed/Planned EMV Analyzing Zim. SAfr. Global Platform Symposium 7

Latin America 2001/2002 Mex. Costa Rica Col. Ecuador Ven. Peru Brazil Bol. Par. Chile Arg. EMV Migrating/In Progress EMV Committed/Planned EMV Analyzing Uruguay Global Platform Symposium 8

North America 2001/2002 Key Members are both issuing and planning to issue EMV smart cards, though no national migration is planned. EMV Migrating/In Progress EMV Committed/Planned EMV Analyzing Global Platform Symposium 9

One. SMART Master. Card • Highly flexible umbrella strategy for helping members introduce smart cards in cooperation with Master. Card – Based on extensive consumer research – Reflects Master. Card’s approach of providing comprehensive support and flexibility to members – Members can choose application set, platform, security strategy, chip size, and card designs Global Platform Symposium 10

One. SMART Master. Card Role • Assist members in end-to-end implementation – Opportunity identification – Business requirements • Process requirements • Support – Program development – Program launch • Work with industry to improve the state of the art – Standards and specifications • Maintain alliances/relationships with best in class vendors Global Platform Symposium 11

Value-Added Applications Key To A Positive Business Case In Many Markets • • • Data Storage Ticketing Couponing Loyalty Authentication (non-payment) Enable issuer differentiation and enhanced functionality Global Platform Symposium 12

Value-Added Applications The Business Case • Grow GDV by – Improving acquisition, usage, retention • Increase the account’s lifetime value • Add new fee services • Leverage non-payment opportunities – Partner business process improvement – Reduced inefficiencies or fraud Global Platform Symposium 13

Value-Added Applications Developing The Business Case • Master. Card has developed a business case tool to model: – Specific opportunities – Multi-application programs – Multi-party programs • This model works in concert with the Master. Card chip payment models developed by EPI – These models will be merged Global Platform Symposium 14

Platform Flexibility • Master. Card is only payments association to actively support all major chip platforms • Master. Card M/Chip™ available on MULTOS, Java. Card, and proprietary platforms Global Platform Symposium 15

Platform Flexibility • Master. Card is a member of both MAOSCO and Global Platform • Committed to creating a universal platform/ infrastructure that will make it easier for members to issue multi-application cards Java. Card Global Platform Symposium 16

Flexible Issuance Options • Via ‘MULTOS Issuance Partner’ – Indirect relationship with MULTOS key management authority (KMA) via MIP – MIP interacts with MULTOS KMA on card issuer’s behalf – May upgrade to direct relationship if required • ‘Standard’ card issuer – Direct relationship with the MULTOS KMA operated by MXI and within the ‘Global’ MULTOS Domain • Co-located MULTOS KMA – Managed by MXI KMA on card issuer’s behalf • Private domain MULTOS KMA – Licensed by MXI (complete software/hardware solution) – Operated by card issuer themselves or trusted 3 rd party Global Platform Symposium 17

Master. Card/Global Platform • Master. Card staff assigned to Global Platform Standing Committees and relevant working groups • Candidate nominated to chair re-launched Business Requirements Working Group • Facilitated Card and Application Management System (CAMS) contribution • Evaluating additional security contributions Global Platform Symposium 18

Master. Card Objective Broaden Global Platform (GP) scope to embrace all open, industry technologies, including asymmetric approaches • In particular, aspects of Master. Card’s MULTOS experience • But not necessarily prescriptive MULTOS, rather a class of solutions of which MULTOS is one – There could be others Global Platform Symposium 19

Possible/Desirable Outcome Today MULTOS Card Manager Open Platform Card Manager MULTOS API Java Card API Microsoft API MULTOS O/S Proprietary O/S Microsoft O/S Extended Global Platform Card Manager Future MULTOS API Java Card API Microsoft API MULTOS O/S Proprietary O/S Microsoft O/S Global Platform Symposium 20

Java-tisation of MULTOS The Goal applet Load mechanism Card specific loader Same Terminal Functionality Global Platform Symposium 21

Our Contribution Context • Meaningful contribution on viable terms: – Intent for IPR terms to be normal GP practice, if at all possible – Minimal pre-conditions or constraints – At scope and level appropriate to GP • CAMS terminology will be adopted • ‘GP’ style technical authoring style to aid and speed review and debate in working groups • Timed to fit with next iteration of specifications Global Platform Symposium 22

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