Implementing Chip

with VSDC
Kudzai Ncube
July, 2013
Lusaka, Zambia

Visa Confidential
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Implementing Chip with VSDC © 2013 Visa. All Rights Reserved.

 Agenda

• Brief history of chip cards and Visa’s role in development

• Reasons for implementing chip
• Chip Business Rules
• VSDC Planning and Implementation
• VSDC Project Steps

Implementing Chip with VSDC © 2013 Visa. All Rights Reserved. 3

Chip Card Basics

Visa Confidential
 Agenda

• Brief history of chip cards and Visa’s role in development

• Physical description of the chip card
• Typical use and benefits of chip cards
• Specifications

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 Banking Card Evolution

• Started 1950, used for • Started 1970 • Started 1986 (banking)

payments Diners Club • Stores data on magnetic • Stores data on chip and
• BankAmerica started 1958 stripes magnetic stripes
• Initially used for ID • Allows automation and • Allows maximum security
• Secured against forgery and minimizes paper utilization – cardholder verification
tampering • Now low security and fraud prevention
– Embossing and tipping – Data world • Need for global
– Holograms and micro readable/writable interoperability – hence
printing – Card readers EMV
– Invisible patterns using available for less than
fluorescent fibres 40€
– Signature panel – Skimming

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 A Brief History of Chip Cards and
Visa’s Role – 1st 30 Years

1974 1986 1988 1993

Invention of Chip French banks Europay, MasterCard and

Cards and Proof of decide to convert Visa form a working group
Concept to chip cards to develop joint industry-
wide specifications,
emphasizing importance
of global interoperability

Visa tested the world’s first

sophisticated function
‘SuperSmart’ card marking the
foundation for multifunction card

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 A Brief History of Chip Cards and
Visa’s Role – 1st 30 Years (Continued)

1994 June 1995 August 1995 1997

1997

Joint Europay,
UK launches the
MasterCard and Visa
APACS Chip
industry-wide chip card
Project based on
specifications completed.
VIS First Country-
Visa and the industry
wide launch of chip
committed to building an
infrastructure for chip
Visa published the In April, Visa
Visa Integrated Japan member
Visa began development of VisaNet Circuit Card issues VSDC
systems support, operating principles and Specifications (VIS), cards with Smart
payment service definitions which defines the Commerce Japan
Early development ensured that Visa implementation project launch in
infrastructure in place to support chip of joint payment chip Kobe, Japan
cards card specifications
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 A Brief History of Chip Cards and
Visa’s Role – 1st 30 Years (Continued)
Feb
1994
1999 June
Oct 1999
1995 August
May 2001
1995 1997
2002

A major new initiative to

advance a standardized
infrastructure for multiple
application chip cards launched
with the creation of a new
organization called Visa’s Open
GlobalPlatform, Inc. Platform
www.globalplatform.org Specification
donated to
EMVCo, LLC was formed by Europay, GlobalPlatform First UK Chip and
MasterCard and Visa to manage, maintain and for cross PIN transaction
enhance the EMV Integrated Circuit Card industry use takes place with a
Specifications for Payment Systems as and Visa branded chip
technology advances and the implementation of advancement card
chip card programs become more prevalent
www.emvco.com
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 A Brief History of Chip Cards and
Visa’s Role – 1st 30 Years (Continued)

1994
2002 June
2003
1995 August
July 2003
1995 1997
2004...

First EMV Moscow Social Canada JCB joins

transaction in Visa’s Card issued announces EMVCo and
Latin America with a dual plans to American
Region with eventual interface chip migrate to Chip Express follows
expansion in Mexico with the Visa in 2009
and Brazil Brand in Russia

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 A Brief History of Chip Cards and
Visa’s Role – Evolving Technology

And Onward to Present…. August 1995

Visa develops global Visa develops mobile pilot Visa develops prepaid pilot
payment specification for payment specification for payment specification for
contactless chip cards contactless chip cards New contactless chip cards New
New chip-based payment chip-based payment chip-based payment
specification to specification to complement specification to complement
complement existing chip existing chip card existing chip card technology
card technology technology

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 Types of Chip Cards

• Protected Tokens • Memory • Microprocessors

– Phone Cards – Non Secured ID – Stored Value / Payment
– Disposable Stored – Conditional Access
Value Cards – GSM, Multi-application
– Promotional/Convenience

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 Payment Chip Card Features

New Features Legacy Features

Micro Chip
Plastic Card Body

Embossing, Printing, etc.

Brand Marks, Hologram

Software Magnetic Stripe (HiCo)

• Operating System
• Application(s)
• Security Keys
• Cardholder Data

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 A Closer Look at the Micro Chip

RAM (Random
Access
Memory) –
volatile memory Micro Processor
that loses data
as soon as the RAM
power is lost
CPU
EEPROM – EEPROM Central Processing
Electronically Unit – executes the
Erasable ROM card application,
Programmable Read- processes the card
Only Memory is a data, and takes
non-volatile memory decisions on the
technology where
various actions that
data can be erased
and rewritten. may be invoked
EEPROM is widely
used in chip cards, ROM (Read-Only Memory) – Permanent
usually in 1Kbyte to memory that cannot be changed once it is
8Kbyte created. Used to store chip operating
quantities systems and permanent data

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 Micro Module Assembly

Wafer
Probe
Dice
Die
Motorola, Atmel,
Texas Instruments,
SGS Thompson,
Philips,
Siemens, Hitachi

Module Protect Assemble

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 Chip Card Manufacturing

Print – Laminate
Sky High Transit Sky High Transit

Punch
Sky High Transit Sky High Transit Sky High Transit

Mill

1234 Sky High Transit

1234 Sky High Transit

Insert
1234 5678 9012 3456
John Doe - Exp 13/999
Test – Serialize
Personalize
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 What is EMV?

• Global specification supporting smart card / terminal

interoperability and transaction processing of credit and debit
cards
– Non-competitive specification
– Developed by Europay, MasterCard and Visa (EMV) in 1994
– EMV Version 3.1.1 in 1998; EMV Version 4 in 2000
– EMV Version 4.2 since June 2008

• EMVCo LLC formed in April 1999

– Ownership and promotion of EMV specs
– Establish unified type approval
– Now owned by;
• MasterCard, Visa, JCB, American Express and China
Union Pay
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 EMV and its Purpose

EMV provides international interoperability for chip-based

credit and debit
• Set of functions for:
– Communicating with card (protect card)
– Framework for card and cardholder authentication
– Framework for card and terminal risk management
• It provides:
– Security - ability to ‘keep secrets’; active security;
upgradeable
– Capacity - much more data on the card
– Data processing - ability to receive, process and supply data

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 Payment Specifications Review

• EMV specification hierarchy within the payment industry

ABI
NATIONAL (examples) UKIS
CB5 JCCA

CARD SCHEMES VIS MCHIP AEIPS

INDUSTRY WIDE

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 Visa Integrated Circuit Card Specification
(VIS)

• Visa’s implementation of EMV

– Defines how chip transactions work for Visa cards
• Current version is VIS v1.5
– Published May 2009

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 What is VSDC?

● VSDC is the acronym for Visa Smart Debit and Credit

● Visa’s payment application was developed in accordance with
Europay, MasterCard and Visa (EMV) Specifications and Visa
Integrated Circuit Card Specifications (VIS)
● Provides enhanced security and functionality to support Visa’s
current range of card products

Credit Debit Commercial

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 Magnetic Stripes are Vulnerable in
Today’s World

• Magnetic stripe cards are most vulnerable when:

– The transaction cannot go online for authorization
– The card issuer cannot verify that the person using the card is
the real cardholder
– The terminal or the issuer cannot verify that the card
is a legitimate card
– New technology is key to the environment e.g. unattended
acceptance points
• VSDC adds new features to Visa products to combat fraud in
these environments and to expand usage opportunities into new
acceptance points

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 What VSDC Provides

• VSDC provides the features and issuer functionality to answer

these five key questions
1 Is the card valid?
5 Is payment
guaranteed?

2 Is the card
??? data valid?

4 Istransaction
the type of

requested allowable
in this environment? 3 Is the presenter of the
card the legitimate
cardholder?

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 VSDC Cards Offer More Control Than
Magnetic Stripe
VSDC contains the same VSDC cards continue to
data as the magnetic carry a magnetic
stripe and new stripe with the same
features/data specific cardholder
to the chip application information as before
● Offline and online ● Cardholder Name
usage controls ● Card Account
● The ability to Number
authenticate the card’s ● Expiration Date
validity
However, the Service
● Offline PIN verification Code must be
● The ability to change updated to indicate
the card’s data after the presence of a
the card has been chip
issued

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 VSDC Components and Checks

Card Terminal Issuer

Checks Checks Checks

● Offline controls: ● Card expiration date ● Online PIN or results of
Offline PIN
▬ Number of offline ● Authenticity of card and
transactions ● Amount of offline spending
data (SDA and DDA)
▬ Amount of offline ● Results of transaction
● Applies rules on when to
transactions send transactions online data integrity
▬ International vs. ● Card’s Authentication
▬ Floor limits randomly
domestic limits send transactions Method (CAM)
online Also
● Cardholder’s PIN offline
● Can change parameters in
● Issuer’s identity the card

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