The Whys and Wherefores of Chip

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The Whys and Wherefores of Chip PIN

• A brief explanation of the technology and the
  operational implications of Chip PIN

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Where are we now?

• The Credit Card industry is being defrauded to
  the tune of 400million per year
• Credit Card companies shoulder the burden of the
  loss
• Current technology uses the magnetic stripe on
  the Credit Card

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What About the Future?

• Credit Card fraud will increase
• It is estimated that it will reach 800million
  per year by end 2004
• The losses will reach a level where the Credit
  Card companies will cease to be able to operate
• No more credit card sales! How would that affect
  you?

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What is the Solution?

• Obviously something has to be done!
• Enter technology
• In the guise of Chip PIN
• This technology aims to
• Cut the level of fraud drastically
• Increase card security
• Give peace of mind

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So What is Chip PIN?

• This is divided into two parts
• Chip
• Each credit card will have a microchip embedded
  on the card indeed some are already available
• PIN
• Personal Identity Number this allows one to
  authorise the cards use
• This is entered at the point of payment

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What does the Chip do?

• The microchip embedded on the card is dynamic
• It can be read from and written to
• It is very heavily protected by encryption
• It is very hard to defraud using this type of
  card
• It will allow the Credit card companies to keep
  going

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What is the Purpose of the PIN?

• The PIN enables the card
• It is more secure because -
• Only the card user knows it
• The card never leaves the owners possession
• The payment terminal is shielded to prevent
  others accessing information
• The card cannot be copied as Magnetic Stripe
  cards can, and even if it could the PIN would
  not be available
• If the card is stolen, it cannot be used without
  the PIN

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How does it Work?

• The card reader is customer facing
• It is attached to the PoS by shielded cable
• The sale is rung up and the terminal given to the
  customer

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How does it Work?

• The customer inserts the card
• The unit then gives instructions to follow

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How does it Work?

• The customer then inputs the PIN
• If everything is all right the sale is
  completed
• If there is a problem the customer is notified
  by the unit

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How does it Work?
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What are the Benefits?

• So far weve talked about the benefits to the
  Credit Card companies what are the benefits to
  the retailer?
• The banks are offering a small reduction in
  acquirer fees
• The retailer will be shielded from any fraud
• Come 1st January 2005, the retailer will be
  responsible for any fraud if they are not Chip
  PIN compliant!

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Responsible for Fraud?

• Currently if someone uses a stolen card, the bank
  carries that debt the retailer still gets paid
• From 1st January 2005, any fraud will be charged
  back to the retailer if they are not Chip PIN
  compliant
• Remember card fraud will be running at
  800million pounds per year by then!

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Responsible for Fraud?

• The fraudsters will review their tactics in the
  light of this
• They will target those retailers who are not Chip
  PIN compliant
• The fraud will migrate to those still only able
  to accept magnetic stripe cards, and they will
  have to accept the loss!

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Points to Note

• Is your current system Chip PIN compliant?
• If not, are there any plans to make it so?
• Bear in mind that it took BCP 3 months to develop
  the software and a further 3 months to get
  accreditation from the banks
• BCP were one of the first in the queue the time
  required for accreditation is now significantly
  longer, and will get longer still as more
  companies apply some people are going to miss
  the boat!

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Points to Note

• Is your PoS hardware capable of taking Chip PIN
  cards?
• Remember that Chip PIN needs a terminal to make
  it work can your current supplier assure you
  that they have one that is compliant?
• BCP already have done this work and have the
  solutions
• Can your current supplier say the same?

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What can BCP Offer?

• BCP can offer
• A Chip PIN solution as an integral part of
  their PoS software package
• A standalone Chip PIN solution
• Advice on the requirements of Chip PIN

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Come On In

• Have a look around our website
• www.bcpsoftware.com
• Check out the software offerings
• Look at the customer profiles
• Remember these customers will be Chip PIN
  compliant by the end of 2003
• Will you be Chip PIN compliant by then?
• If you have any questions please contact us
  well be happy to help

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How to Contact Us

• Telephone [phone]
• Ask for Retail Sales
• Fax [phone]
• E-mail Retail_at_BCPSoftware.com