Michelle thornton navigating emv and apple pay
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“As credit unions we think of ourselves as the folks in the white hats. Part of that is having a system that is going to protect your members and protect their mobile payments.” Michelle Thornton, CO-OP Financial Services
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Michelle thornton navigating emv and apple pay
- 2. FOCUS ON SECURITY 2015 SIX ESSENTIAL QUESTIONS FOR CREDIT UNIONS
- 3. DIRECTOR OF PRODUCT DEVELOPMENT, CO-OP FINANCIAL SERVICES THORNTON MICHELLE
- 4. IS SECURITY A HOT TOPIC? 1.
- 5. STILL INSECURE? Source: Identity Theft Resource Center 783 U.S. Data Breaches in 2014 A Record High 100 Medical & Healthcare Records Stolen This Year MILLION 400,000Financial/Banking/Credit Records Stolen So Far in 2015
- 6. Eva Velasquez, ITRC The ubiquitous nature of data breaches has left some consumers and businesses in a state of fatigue and denial.
- 7. DAZED AND CONFUSED Consumers who think mobile payments are the safest way to pay in store. (Tripwire, 2014)2% Adults “agree” or “strongly agree” that consumers have lost control over how personal information is collected and used by companies. (Pew Research, 2014) 91%
- 8. MOBILE INHIBITION 36% 15% 22% Would not try mobile payments because of security concerns Had used a mobile wallet or were thinking of doing so Were concerned their financial data might be stolen.
- 12. EMV October 1, 2015 is the liability deadline APPLE PAY Fast start, steady growth TOKENIZATION Set to expand beyond Apple Pay
- 13. WHAT’S THE DIFFERENCE? • Security for plastic cards • Authenticates using cryptography • Deters counterfeit cards • Uses a processing chip implanted in the card EMV TOKENIZATION • Security for digital environment (online, mobile) • Replaces card data with “tokens” that can’t be used by others • Also uses cryptography • Powers security in Apple Pay Source: Smart Card Alliance
- 14. THE YEAR OF EMV • 575 million EMV chip cards will be issued in the U.S. by the end of 2015 – up from 120 million at the start of the year. (Smart Card Alliance) • EMV merchant terminals: 59% by 2015 (Aite Group) • Liability shift: October 15 • Primarily credit: debit much further behind
- 15. APPLE PAY THEN & NOW 700,000 Locations 2,500 Financial Institutions Coming Soon to Vending Machines
- 16. BY THE NUMBERS 4 IN 10 IPHONE 6 USERS HAVE TRIED IT Nearly half of those who haven’t expect to in the next six months THREE-QUARTERS OF THOSE WHO’VE TRIED IT MADE A SECOND APPLE PAY PURCHASE AT THE SAME LOCATION Used at Physical Location 43% Used in Store and In-App 37% Used In-App Only 19%
- 17. A+ of Apple Pay users rated their satisfaction 4 or 5 on a five-point scale
- 19. IS THAT ALL THERE IS? • Biometrics: Are Passwords Passe? • Analytics as a tool • CardNav – Card Controls and Alerts
- 20. WHICH ONE DO YOU CHOOSE? 3.
- 21. FALSE QUESTION The answer is “both.”
- 22. HOW DO I PRIORITIZE THESE TWO TECHNOLOGIES?
- 24. WHAT DO OUR MEMBERS NEED? 4.
- 25. se·cu·ri·ty (səˈkyo͝orəodē/) Noun 1. the state of being free from danger or threat. 2. the state of feeling safe, stable, and free from fear or anxiety.
- 26. DEMYSTIFY FRAUD
- 27. • What is it? • Where is it? • Why are you introducing it? • What can and can’t it do? • How do we use it? TECHNOLOGY EXPLAINED
- 29. YES. www.co-opfs.org/CardPayments GET THE LATEST ON EMV, TOKENIZATION AND APPLE PAY:
- 31. APPLE PAY & FRAUD
- 32. HOW DO I GET STARTED? 6.
- 33. SET YOUR PRIORITIES • Encourage mobile engagement? • Improve member experience? • Reduce fraud losses? • Position yourself as an advocate? WHAT ARE YOUR LARGER GOALS?
- 35. GET HELP
- 36. GET READY TO GO – AND GO
- 37. DISCUSSION MASON OSWALD Operations Card Services Manager Idaho Central Credit Union JEAN NELSON eBranch Manager Missoula Federal Credit Union
Editor's Notes
- [Welcome]
- [Introduce yourself] Today we’re going to cover some of the big topics in security by asking six key questions. Are you ready? Here goes...
- First, of course, after a big year for security last year you might be wondering if this topic has cooled off at all.. Our thinking: No, it has not.
- Although we did not have a Target breach in 2014, we did have a year of worrying about it. So far this year, there have been nearly 400,000 financial records stolen. And what’s keeping this story in the news recently is nearly 100 million medical and healthcare records have been stolen this year. Data breaches ara a big deal and they persist. [http://www.idtheftcenter.org/images/breach/DataBreachReports_2015.pdf]
- On the consumer side of things, there’s an effect that goes beyond finances. [read quote]. People are tired. They’re tired of reading the news about breaches. They’re frustrated because it keeps happening and it seems like there’s nothing they can do about it. They may be going on with their financial lives, but it’s with a bit of denial. http://www.idtheftcenter.org/ITRC-Surveys-Studies/2014databreaches.html
- To be sure, mobile and online payments are on the rise. They haven’t been squelched. But we’re wondering if there isn’t some quelling effect from the concern about security. In a Tripwire survey, only 2 percent of U.S. consumers named mobile wallets like Apple Pay and Google Wallet safe to use in-store. That’s in spite of huge advances in security with tokenization. Meanwhile, 91 percent of adults think they’ve lost control over how personal information is collected and used by companies. The net resultt? People don’t feel safe. And not only that, they don’t understand what’s compromising their safety – nor what they might do to help themselves. And even though we’ve seen quite a bit of growth in mobile payments, we’re wondering if this isn’t still having a quelling effect on growth. If consumers don’t feel safe, and they don’t feel like they can protect themselves, how can they use payments – including cards – with confidence? http://www.tripwire.com/state-of-security/security-data-protection/security-controls/mobile-payment-security-faces-an-uphill-battle-in-2015/ http://www.pewinternet.org/2014/11/12/public-privacy-perceptions/
- And here it is: [review slide] [NOTE: WILL ADD SOURCE LINK TO NOTES WHEN I CAN RE-FIND IT]
- You may have differing opinions about whether or not it’s important for credit unions to encourage and promote mobile payments and other kinds of mobile interaction, like mobile banking. You may have differing opinions about whether or not it’s important for credit unions to encourage and promote mobile payments and other kinds of mobile interaction, like mobile banking. To the extent that you want to get involved in mobile, security is an important factor. If members don’t trust your technology – and by proxy, you – your mobile channel is going to be inhibited. I think the implications, too, go beyond mobile payments and digital as a whole. You have to ask yourself whether your credit union presents itself as trustworthy. Credit unions think of themselves as the white hats in financial services. Part of that ethos is having the systems in place to defend members against fraud and breaches and even odd errors. Security is a hot topic because trust is a hot topic.
- So, if we want to move forward with great security, where should we focus our energy?
- Let’s start by asking whether anything has changed since last year’s THINK. Last year at THINK, we were talking about EMV and didn’t know that Apple Pay would exist this year. Has the conversation changed? To that extent, yes it has. There’s not one but two technologies you now need to consider.
- Today, the focus on security centers on EMV and tokenization – which is what powers the security behind Apple Pay. [review slide]
- We always have this moment, when we want to dive into the technology behind these methods, but don’t want to offer a PhD-level analysis of how they work. Just briefly, here’s a comparison of the two technologies. [review slide]
- After years of very little traction, EMV is picking up speed this year. [review slide]
- And here’s a quick retrospective on Apple Pay. Let’s start by saying that last year at THINK, there was no Apple Pay. We didn’t even really know it was coming. Apple Pay came out in October of last year. So in less than six months, here’s what’s happened:
- [REVIEW SLIDE] The big takeaway: It’s definitely taking root.
- And people who use Apple Pay seem to like it. 98 percent gave it a four or five on a five-point scale. In fact, 60 percent rated it a 5.
- Beyond Apple Pay, tokenization is going to be the security component on other mobile wallets, like Google Wallet and Samsung Pay. So if your credit union gets set up for tokenization, the payoff will extend beyond Apple Pay.
- Are tokenization and EMV the only security game in town? No. And in fact we could go on for hours covering all of the security innovations on the horizon. To name a few: [review slide]
- Here’s a question I hear a lot: Which one of these should I choose?
- Don’t ask that question – and here’s why. You need both EMV and tokenization. And it’s not just that one question that gets asked over and over. Sometimes people want to know whether tokenization uses EMV, or if tokenization will eventually replace EMV. You can, of course, choose any combination you’d like. However, EMV and tokenization are not replacements for each other. They do different things. And ultimately, you probably want both. EMV works best for card-present transactions. For just about every credit union, that’s a large portion of their transactions. You can strategize about when you implement EMV and how. But it’s hard to recommend that you just forget about EMV. Tokenization has seen a meteoric rise in the last few months, thanks to Apple Pay. And Apple Pay is still the best most immediate reason to get tokenization right now. But tokenization is going to have wide-ranging implications. It works where EMV is not especially useful right now – for cardless transactions.
- Will the parameters change by THINK 16? How will they change? If I knew that, I’d be placing some bets right now. Remember, last year at THINK tokenization and Apple Pay were just a twinkle in someone’s eye. Later, when we talk about wallets, we’ll get an even greater sense of life’s evanescence – the change there is massive and continuous. So, will we find an answer that will hold for the next several years? No, unless it’s to proceed now and remain flexible about the future.
- Our fourth question today: What do your members need in the way of technology – and also information?
- The short answer, of course, is security. And here’s what security means: [review slide] They need to be safe – and they need to feel safe.
- To get there, we think credit unions need to invest in member education as well as security technology. Though most people are insecure about the safety of their information, they don’t understand how fraud happens, what you’re doing to protect them, or what they should be doing to protect themselves.
- When you add EMV or tokenization, take a minute to explain to members what’s going on: [review slide] This is new technology to most people. They need some help understanding what it’s for and how it works.
- Of course, none of this matters if it’s not available to credit unions. Is this technology credit-union-ready?
- Yes – isn’t that great? It’s ready, but it can be complicated. And if you want a more comprehensive set of information and tools, you might want to visit this page to find interactive tools, webinar recordings, white papers, e-books – all sorts of information that can help.
- Haha. Yes. We’ve come a long way from 2014, but we’re still seeing hiccups here and there. [talk about the PIN vs. signature issue at in-store EMV terminal?] This shouldn’t discourage you from moving forward with EMV, but it should prepare you for a few bumps in the road.
- Here’s an issue we keep hearing about: Apple Pay as a magnet for fraud. Some of this has been rumor and innuendo, but at least some of it seems to have a basis in reality. [talk briefly about what’s behind some of the valid rumors and what credit unions might do/think]
- The final question – the big question – is, how do you get started. That’s a good question.
- In this presentation, we wanted to convey that security has an importance that extends beyond security itself. So when you’re contemplating security, try to look at it first in the larger context of your credit union. [review slide]
- Create a strategy – how does implementation fit into your larger goals and activity?
- Get help. If you’re a CO-OP client, we can help you with EMV and tokenization rollout.
- Finally, just go. We’ve been talking about EMV for years. We’ve also been talking about the coming wave of mobile payments. Now both of these technologies are within your reach. When we reconvene at THINK 16, even if you’ve fully implemented both EMV and tokenization, chances are good that we won’t be done with this topic. Security is going to continue to be a big concern for members and the technology is going to continue to evolve. But we’ve come a long way already since 2014. Let this be a year of great progress.
- And, speaking of progress, we’re happy now to bring in folks from two credit unions that have been right at the forefront of adopting security technology: [introduce panelists] SUGGESTED QUESTIONS: Tell us a little about what you’ve been doing in this area. What motivated you to do this? Did your members express an interest? Was it a challenge getting this technology to work? What have you been doing to educate members about this technology – and to encourage adoption? What’s been the payoff for you? Any advice for people here today?