The card networks have set their EMV liability shift mandates, causing the financial industry to scramble to meet the demands...including IADs. What does your company need to know about EMV? Where does the industry currently stand on moving forward with implementation?

1. The Long Road to EMV
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Welcome!
Thank you for joining us.

2. Mark Smith is Vice President of Kahuna Financial
Solutions, a division of Kahuna ATM Solutions. Mark has
over 17 years in the ATM industry and currently serves on
the ATMIA Cash Council and Security Committee.
David Tente is the U.S. Executive Director of the ATM
Industry Association (ATMIA). David has over 30 years of
experience in IT sales and business development and 13
years in the payments industry.
Our Presenters:

3. Why is the U.S. Moving to EMV?
• The ATM Security Arms Race
• EMV was developed by three of the major card networks –
Europay, MasterCard and Visa
• The same size and thickness as a standard magnetic-stripe
card…only with an embedded microprocessor
• So far, criminals have not been able to clone of create fake EMV
cards
• Most of the world has already or is in the process of switching to
EMV

4. Why is the U.S. Moving to EMV?
• Card fraud shifting to markets that still rely on mag stripes cards
• Visa and MasterCard announced their liability shift timetables in
2011
o Full MasterCard Shift = October 1, 2016
o Full Visa Shift = October 1, 2017

5. Can the U.S. Meet the Deadlines?
Steps to EMV Migration
1. Agreement on Debit Solution
2. Network Testing & Certification
3. Processor Testing & Certification
4. ATM Testing & Certification
5. Upgrade/Replacement of all ATM fleets

6. Can the U.S. Meet the Deadlines?
1) Agreement on a Debit Solution – or AID
AID – the numerical code that points to an application on the chip
embedded on the card.
• An EMV card and EMV terminal MUST have at least one AID in
common
• MasterCard, Visa and Discover each have their own solution
o The Secure Remote Payments Council has adopted Discover’s
solution
• No AID agreement = EMV upgrades at a standstill
• Impact of Federal Court ruling on debit solution development is
unclear

7. Can the U.S. Meet the Deadlines?
2) & 3) Network and Processor Testing and Certification
• U.S. EMV certification will take at least 6 months
• Canada, a much less complex market with only one debit network
took as long as two years
4) & 5) ATM Testing and Certification + Software & EMV
Installation
• Despite certification in other countries, each ATM manufacturer will
have to have their terminals certified on U.S. networks
• Each ATM takes about a month to certify

8. Comparing the Costs: Fraud vs. EMV
• ATM upgrades are estimated to start at $300/ATM +
• Overall upgrade costs could reach $2,000 to $4,000/ATM
• EMV does not protect against card-not-present transactions
• Recent major breaches have occurred at the processor level…not
at the ATM.

9. Comparing the Costs: Fraud vs. EMV
• EAST and Europal estimate that 80% of fraud on European cards
is occurring in the U.S.
• Costs of fraud:
o Cash
o Card re-issue
o ATM damage
o Loss of confidence in the ATM location
• ATM skimming losses per incident average $50,000
o $2.4 billion annually in card losses
• Card skimming represents 80 percent of all attacks against the
ATM

10. Comparing the Costs: Fraud vs. EMV
Other Ways to Mitigate Fraud:
• Moving to PIN-based transactions over signature
• Investing in low-cost anti-skimming devices
• Eliminate the Card – Move to mobile
o Secure QR code tokens
o Near Field Communications (NFC)
…EMV compliance could set the state for future technologies,
including mobile.

11. Where We Stand Today
• All major vendors offer EMV-capable ATMs and many existing
ATMs are capable of being upgraded
• Approved PIN pads are already available due to the mandated
Triple DES upgrades.
• Some financial institutions and larger ATM deployers are already
ordering new ATMs with EMV card readers.
o Some manufacturers are encouraging their customers to
choose the EMV option when buying new machines

12. Preparing for EMV
• EMV is a short-term project
o Service companies may be reluctant to add staff to handle the
extra field work
o Manufacturers will be unlikely to significantly increase production
• Plan for supply shortages and service delays…plan ahead.
• Anyone that certifies today will have to recertify
• Develop a customer education plan
• Keep Updated on the Answers to these Questions –
o When is your processor going to be ready to conduct EMV transactions?
o What is the card scheme going to be?
o Will EMV affect network routing choices and, if so, how?
o Is an upgrade to Windows 7 necessary?
o How can you upgrade machines in a timely manner?
o How are you going to educate your customers?

13. What is ATMIA Doing?
• ATMIA and other industry groups have asked the networks to
delay their liability shift deadlines.
• The MasterCard Maestro liability shift has already passed
o MasterCard announced a new set of acquirer-based fraud
detection tools that are meant to help with industry fraud by
blocking Maestro transactions at approximately 80 percent or
more of the nation’s ATMs and monitoring the remaining
machines.
• Participation on the EMV Forum – ATM committee
*ATMIA is able to contribute thanks to the donations from IADs to the
U.S. Defense Fund. Thank You!

14. Questions. Comments. Concerns.
We will now take a few moments to address your questions.
Should we run out of time, please email further questions or
comments to:
info@kahunaatm.com
Thank you!

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