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Spotlight on Contactless

Spotlight on Contactless. Ryan Altern Product Marketing Manager EMEA. Agenda. Introduction to Contactless Contactless Payment State of Rollout VeriFone Contactless Strategy Product Roadmap NFC. Introduction to Contactless. Short Range RF Technology.

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Spotlight on Contactless

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  1. Spotlight on Contactless Ryan Altern Product Marketing Manager EMEA

  2. Agenda • Introduction to Contactless • Contactless Payment • State of Rollout • VeriFone Contactless Strategy • Product Roadmap • NFC

  3. Introduction to Contactless

  4. Short Range RF Technology Interaction between two devices, based on RF induction, to exchange data • Main characteristics: • Short range interaction (from a few centimeters up to a few meters) • Suitable for transmission of small amount of data • Interaction generally between an active device (with power source) and a passive device (has no power source of its own, powered by the active device)

  5. RFID Is the term ‘RFID’ synonymous to ‘Contactless’ in the payment world? …..NO! • ‘Contactless Payment’ • is the industry term. • RFID is associated with non-secure data transfer • Please Do not refer to Contactless Payment as RFID! Access Control Transfer of Information Contactless Payment Where is RF Technology is Used? • Automatic identification of objects or bodies • A tag containing the coil (antenna) is attached to the object • Used for: storage control, freight control, anti-theft in shops, animal control • Generally not secure • Used to control entrance by reading the entrant’s card • Generally not secure • Short range data transfer to distribute information • Used for: access to content, data exchange (ie. ‘NFC’)

  6. Contactless Payment

  7. Definition and Features Non-cash payment transaction No physical connection between the consumer payment device and POS/reader Using standard payment network infrastructure • Targeted for small value transactions • Usually the equivalent of up to $25/€15/£10 • Targeting cash transactions • Main benefit: quick transaction • Other conditions for quick transaction:No PIN and No Signature • Easy to operate, no need to orient card • Flexible Form Factors: • Contactless smart card • Key Fob • Mobile Device (cellular phone, PDA)

  8. For Card Associations and Issuers For Merchants For Consumers Market Drivers and Benefits • Increase card transaction volume and revenue by replacement of cash transactions • Minimal change to infrastructure • Fast transaction time, queue shortener • Greater spend at checkout, no cash shortage • Less cash handling – less errors and fraud • Reduced terminal maintenance (higher MTBF) • Competitive differentiation • Transaction speed and convenience • No need to carry cash • Fraud Reduction through reduced card skimming

  9. Target Market Segments • QSR • Pharmacies & drugstores • Convenience stores • Supermarkets • Deli stores • Kiosks • Vending machines • Sport stadiums • Parking • Transit

  10. Association Contactless Schemes • Scheme called PayPassSometimes also called OneSmart PayPass • PayPass MagStripe: MasterCard’s contactless-magstripe application • PayPass M/Chip: MasterCard’s EMV-like application • Scheme called Visa ContactlessPreviously called Visa Wave (remained as Visa AP initiative) • MSD: Magnetic Stripe Data; Visa’s contactless-magstripe application • qVSDC: quick Visa Smart Debit/Credit; Visa’s EMV-like application • Scheme called ExpressPay • Specification differentiates EMV and Non-EMV transactions • EMV specification is a subset of their EMV-chip spec • Magstripe scheme only • Similar to Visa MSD

  11. Payment Solution Requirements Cardholder Indicators • Landing zone: • Landing zone frame is clearly marked • Tapping icon in center of landing zone • Card scheme icons (those the reader is certified for) • LEDs: • Visa, PayPass and AMEX require 4 single-light (green) LEDs • Left one lit – ready to accept card, all lit in sequence to indicate card reading • Visa AP and MC AP adopted a 4 color scheme: Blue – ready to accept card, Yellow – card reading, Green – successful transaction, Red – transaction failed

  12. Payment Solution Requirements Cardholder Indicators • Buzzer: • Audio sequence to indicate card reading • Failure may also be indicated by a special tone • Display: • Can be used as an alternative visual indication (4 circles sequentially appear to indicate card reading) instead of LEDs • Can be used, although not mandatory, to display transaction amount and messages • Common in EMV-like schemes

  13. Contactless: State of Rollout

  14. VeriFone Contactless Strategy

  15. 1 Step One:OEM with Channel Partner to Market 2 Step Two:Fast-Track to Market with ODM Partnership 3 Step Three:Abstract andDe-Risk Revenue 4 Step Four:Invest and Develop Intellectual Property Contactless Strategy Overview

  16. 1 Step One:OEM with Channel Partner to Market 2 Step Two:Fast-Track to Market with ODM Partnership 3 Step Three:Abstract andDe-Risk Revenue 4 Step Four:Invest and Develop Intellectual Property Contactless Strategy Overview

  17. 1 ViVOtech’s cross licensing agreement ensures that OEM sales will not prevent us from developing our own technology or locking our customers into a 3rd party interface. OEM Channel Partnership OEM partnership with ViVOtech allows: • Immediate increase in available products • QX110 (Peripherals) • QX110T (Taxi) • QX110D (Vending & QSR) • VeriFone to recognize revenue now • 8,000+ Shipments to date • VeriFone part-numbers streamlines shipments • Standard VFI part-numbers (P153)

  18. 1 Step One:OEM with Channel Partner to Market 2 Step Two:Fast-Track to Market with ODM Partnership 3 Step Three:Abstract andDe-Risk Revenue 4 Step Four:Invest and Develop Intellectual Property Contactless Strategy Overview

  19. 2 • Leverage proven firmware & design resources • Sales Account Support & Documentation • Assisted with antenna design • Provided certification guidance • Provided level 1 debugging at ViVOtech labs • Provided technical support and training • Custom firmware (NETS, NCR, McDonalds) By partnering with ViVOtech, we are able to accelerate the Cultural Transformation & VeriFone’s Core Competency Fast-Track Contactless to Market ViVOtech has enabled VeriFone to drastically diminishour time to market and develop products in parallel ODM Agreement / Reference Designs: • Vx 810 Programmable PIN pad • QX120VFI Peripheral • MX800 SeriesConsumer Facing

  20. 1 Step One:OEM with Channel Partner to Market 2 Step Two:Fast-Track to Market with ODM Partnership 3 Step Three:Abstract andDe-Risk Revenue 4 Step Four:Invest and Develop Intellectual Property Contactless Strategy Overview

  21. 3 Abstract core technology Insulate customer from technology/firmware Perpetual, free, irrevocable licensing of ViVOtech’s API Time Hardware Abstraction Cross Licensing Agreement • Allows VeriFone the option to migrate towards our own technology when we’re ready, meanwhile retaining benefits gained throughout the ViVOtech relationship • Ability to emulate ViVOtech protocols on future products

  22. 1 Step One:OEM with Channel Partner to Market 2 Step Two:Fast-Track to Market with ODM Partnership 3 Step Three:Abstract andDe-Risk Revenue 4 Step Four:Invest and Develop Intellectual Property Contactless Strategy Overview

  23. 4 VeriFone’s Intellectual Property • Become increasingly self sufficient and self sustainable by investing into VeriFone’s contactless technologyPINpad 1000SE Contactless (PIN Entry)Mobile Terminal Vx670 Contactless • Transitioning to VeriFone’s internal contactless technology is plug and play/seamless due to the cross licensing agreement, hardware abstraction, and cDTK API • Today's contactless application will work with tomorrow’s internal technology, and will work across our entire product line“One Contactless Platform, Many Contactless Solutions”

  24. Contactless Product Roadmap

  25. OP 4100 Vx 670 Vx 810 DUET SIM 700/ Vx 700 Features Vx 810 Vx 610 with module PINpad 1000SE MX800 Series QX720 QSR (Non-EMV) QX120 QX110 Peripheral PIN Entry Programmable Multimedia Unattended Wireless Contactless: Product Portfolio

  26. Vx670 Contactless Contactless Roadmap Integrated PP1000SE Contactless Qx720 Contactless Durable \ Outdoor Vx 7xx Contactless OP4100 Contactless MX760 Contactless MX MSR Module MX CTLS Module Field \ Modular Vx810 CTLS Qx120 Peripheral Qx-110Family In Development Available

  27. Peripherals: QX110 Available Now EMV Contactless Peripheral Merchant & Consumer LEDs Customer & Association Branding EMV Contactless Capable Various Stands & Mounts • Being positioned for use with Countertops, ECRs, or other devices with processing capability

  28. Peripherals: QX120 Currently in Beta! Merchant & Consumer LEDs and light bar 128 x 64 Display High Contrast, White Back-Lit Buzzer Overlay Branding LED-Backlit Contactless Symbol Underneath the Landing Zone is the RF Antenna • Supports EMV and MSR applications • Can be connected to most host devices • Product from the leading POS solutions vendor 3 Key USPs: 32

  29. PIN Entry: PP1000SE DVT – Mid Aug Beta Start Mid Sep SR Late Oct • Features • PP1000se compatibility (cabling, stands, applications) • Serial connectivity (USB conversion option) • Applications • Paypass Mstripe and Mchip • Visa MSD and qVSDC • Discover and Amex • Visa AP Focus CTLS 33

  30. Programmable PIN Entry: Vx810 • Program Schedule • DVT Unit availability – July • Beta Start – August \ September • Product Release – September \ October • IDV Update • Larger form factor and centered antenna for easier customer use • Larger antenna size for increased performance • Similar installation procedure Focus CTLS 34

  31. Available Now Positioning • ¼ VGA PCI PED certified • High-end full screen multi-lane retail offering • High quality display & touch panel with multimedia capability Key 3 USP • Display quality and multimedia capability • Cross-platform software compatibility • Global platform MX870 Versions/ Variants • MSR Only • MSR + RFID • MSR + Smartcard MX830 MX850 MX860 Status • Released and available today PayPass, Visa payWave, Discover, AMEX Multi-lane: MX8x0

  32. Unattended: OP 4100 PCI and EMV compliant Designed for locations such as fuel pumps, kiosks and other self-service locations Has an encrypted personal identification number pad Color-screen shows transaction and marketing information to consumers Integrated contactless No qVSDC or Visa-Wave Available Now

  33. Portable: Vx 670 Contactless Positioning • Integrated contactless support in Vx 670 • High-end offering for transit, loyalty, hospitality Key 3 USP • PCI PED • Smallest all-in-one form factor • Takes a great product and addsIntegrated Contactless Versions/ Variants • All Contactless schemes • GPRS, WiFi, Bluetooth • 6 or 12 MB memory • USB support • 40 MM paper-roll support Status • In development, target availability Q4 ‘08

  34. Tools - cDTK cDTK = Contactless Developers Tool Kit • a.k.a. ContactlessCommServer “One Platform,Many Solutions • Vx Contactless DTK • MX Contactless DTK • NURIT Contactless DTK Portable across allVeriFone platform • High level API • TMS agenda • Debugger • Firmware loader • Configuration Contents include: • ViVOtech protocols • VFI proprietary • Others may be added as needed(OTI, Panasonic) Support all majorreader / protocols All components versioned for easier certification 38

  35. Tools - cTMS cTMS = Terminal Management Systems Turn Infrastructure from Liability into Asset • Enable remote management of installed units • Reduce number of field tech touch points & cost Infrastructure becomes“living and breathing” • Update units as card associations standards roll • Keep install base compatible with new cards • Upgrade install base to support NFC features Expand existing solution • VeriCentre 3.x+ being upgraded • NURIT Control Center 7.X+ being upgraded Features • Update reader firmware • Update reader configuration • Update applications • Update key/blocks • Update misc., future 39

  36. Near Field Communications

  37. Near Field Communication • Initiated and supported by the NFC forum • Established in 2004 – Sony and Phillips(2002) • Includes over 100 members • Leading mobile communication, semiconductorand consumer electronics companies such as:Microsoft, Nokia, Philips, Sony, TI, NEC and Samsung • Short-range wireless connectivity between electronic devices for various applications: • Data exchange: smart poster, peer-to-peer • Device activation: garage doors, parking gates, turnstiles • Payment – using the cellular phone as a “wallet with card”(card emulation), or as a “reader” • Based on ISO 18092 and ISO 14443 A/B • Compatible with Payment Association contactless schemes • Multiple NFC mobile phone payment pilots have been announced or are under way in the U.S., Malaysia, China, France, the Netherlands, Germany, and U.K.

  38. Thank You! Ryan Altern Product Marketing Manager EMEA Ryan_a1@verifone.com +44 7775 791 202

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