2007 Banking Colloquium
Workshop No. 5 Chip Card Technology and the Transformation of the Canadian Payment
Card Industry
Why Chip and Why Now?
— SECURITY
— INNOVATION
— EFFICIENCY
Why Chip and Why Now? (continued)
— SECURITY
- Debit card fraud losses
- Up 35% to $95 million in 2006
- Up 60% over past two years
- Cardholder impacts
- 119,000 fraud victims in 2006
- Media coverage
- Cardholder response through changes in behaviour
Why Chip and Why Now? (continued)
- Data on the chip is extremely difficult to copy or change
- Reduce losses and increase confidence
- Reduce fraud management costs
- Pre-emptive strike against fraud migration to Canada
EMV chip technology is the best long-term solution to skimming fraud
Why Chip and Why Now? (continued)
— INNOVATION
- Technology platform for new product and service offerings from Issuers,
Acquirers and merchants
- Payment and non-payment opportunities
- Keep pace with global movement in card payment technology
Why Chip and Why Now? (continued)
— EFFICIENCY
- Multiple applications on same chip – debit, credit, other payments
and non-payment services
- With credit move to PIN, consistent payment experience for credit and debit
The Chip Commitment
Interac Association announced a commitment to chip in February 2005
- Decision based equally on financial and reputational factors
- Migration timeline based on fraud risk factors
Beginning the Chip Migration
Target first INTERAC chip transaction in 2007
- Interac Association is chip-ready
- Coordinated market trial in Kitchener-Waterloo, Ontario
- After December 31, 2007, new ABM and POS models must be chip capable
Chip Migration Timeline
End Dates for Full Chip Migration
Shared Cash Dispensing - December 31, 2012
Excludes credit card cash advances
INTERAC Direct Payment - December 31, 2015
Magnetic stripe transactions will not be permitted in INTERAC Services after
these dates
Questions?
Kirkland Morris
AVP, Strategic Policy & Programs
Interac Association
(416) 869-5061
kmorris@interac.org
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