MasterCard Smart Card
Strategy
Martyn Cooper
Global Platform Symposium - August 2002
MasterCard International
Payment Brands
MasterCard
A Global Smart Card Leader
At Q2 2002, 125 million MasterCard-, Maestro-, Mondex-, and
Clip -branded cards had been issued worldwide
 Already 1/10 of total MasterCard
card base
 98 members in 32 countries
 Over 50% carried value-added
applications
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Total Number of Banking Smart Cards
400
370
+59%
Banking Smart Cards (in millions)
350
300
250
200
233
222
195.72
150
100
66.6
55.5
50
25.9
11.65 11.65 13.98
0
2001
Europe
2004
Asia Pacific
US
Other Regions
Total
Source: Celent, October 2001: Smart Cards in US Banking: Is the Chip Hip?
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Smart Card Migrations
EMV Migrating/In Progress
EMV Committed/Planned
EMV Analyzing
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Europe 2001/2002
EMV Migrating/In Progress
EMV Committed/Planned
EMV Analyzing
Iceland
Finland
Norway
Sweden
Estonian
Latvia
Denmark
Ireland
Russia
Littuania
UK
Netherlands
Belgium Germany
Poland
Lux.
Czech Rep.
France Switzerland
Italy
Ukraine
Austria
Hungary
Slovenia
Croatia
Spain
Greece
Turkey
Israël
Indicates few banks / processors implementing EMV, not entire country
PROPRIETARY & CONFIDENTIAL
7
Asia Pacific 2001/2002
Jp
SKor
China
Tai.
India
HK
VNam
Thai.
SL
Phil.
Mal.
Sing.
Indonesia
Australia
EMV Migrating/In Progress
NZ
EMV Committed/Planned
EMV Analyzing
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Middle East/Africa 2001/2002
Gha.
Moz.
Zim.
EMV Migrating/In Progress
EMV Committed/Planned
EMV Analyzing
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Latin America 2001/2002
Mex.
Costa Rica
Ven.
Col.
Ecuador
Brazil
Bol.
Chile
Arg.
EMV Migrating/In Progress
Uruguay
EMV Committed/Planned
EMV Analyzing
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North America 2001/2002
Key Members are both issuing and
planning to issue EMV smart cards,
though no national migration is
planned.
EMV Migrating/In Progress
EMV Committed/Planned
EMV Analyzing
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OneSMART MasterCard
• Highly flexible umbrella strategy for helping members introduce smart
cards in cooperation with MasterCard
– Based on extensive consumer research
– Reflects MasterCard’s approach of providing comprehensive support and
flexibility to members
– Members can choose application set, platform, security strategy, chip size, and
card designs
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OneSMART MasterCard
MasterCard Role
• Assist members in end-to-end implementation
– Opportunity identification
– Business requirements
• Process requirements
• Support
– Program development
– Program launch
• Work with industry to improve the state of the art
– Standards and specifications
• Maintain alliances/relationships with best in class vendors
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Value-Added Applications
Key To A Positive Business Case In Many Markets
•
•
•
•
•
Data Storage
Ticketing
Couponing
Loyalty
Authentication (non-payment)
Enable issuer differentiation and enhanced functionality
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Value-Added Applications
The Business Case
• Grow GDV by
– Improving acquisition, usage, retention
• Increase the account’s lifetime value
• Add new fee services
• Leverage non-payment opportunities
– Partner business process improvement
– Reduced inefficiencies or fraud
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Value-Added Applications
Developing The Business Case
• MasterCard has developed a business case tool to model:
– Specific opportunities
– Multi-application programs
– Multi-party programs
• This model works in concert with the MasterCard chip payment models
developed by EPI
– These models will be merged
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Platform Flexibility
• MasterCard is only payments association to actively support all major chip
platforms
• MasterCard M/Chip™ available on MULTOS, JavaCard, and proprietary
platforms
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Platform Flexibility
• MasterCard is a member of both MAOSCO and Global Platform
• Committed to creating a universal platform/ infrastructure that will make it
easier for members to issue multi-application cards
JavaCard
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Flexible Issuance Options
• Via ‘MULTOS Issuance Partner’
– Indirect relationship with MULTOS key management authority (KMA) via MIP
– MIP interacts with MULTOS KMA on card issuer’s behalf
– May upgrade to direct relationship if required
• ‘Standard’ card issuer
– Direct relationship with the MULTOS KMA operated by MXI and within the ‘Global’ MULTOS
Domain
• Co-located MULTOS KMA
– Managed by MXI KMA on card issuer’s behalf
• Private domain MULTOS KMA
– Licensed by MXI (complete software/hardware solution)
– Operated by card issuer themselves or trusted 3rd party
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MasterCard/Global Platform
• MasterCard staff assigned to Global Platform Standing Committees and
relevant working groups
• Candidate nominated to chair re-launched Business Requirements
Working Group
• Facilitated Card and Application Management System (CAMS)
contribution
• Evaluating additional security contributions
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MasterCard Objective
Broaden Global Platform (GP) scope to embrace all open, industry
technologies, including asymmetric approaches
• In particular, aspects of MasterCard’s MULTOS experience
• But not necessarily prescriptive MULTOS, rather a class of solutions of
which MULTOS is one
– There could be others
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Possible/Desirable Outcome
Today
MULTOS
Card Manager
Open Platform
Card Manager
Open Platform
Card Manager
MULTOS API
Java Card API
Microsoft API
MULTOS O/S
Proprietary O/S
Microsoft O/S
Extended Global Platform
Card Manager
Future
MULTOS API
Java Card API
Microsoft API
MULTOS O/S
Proprietary O/S
Microsoft O/S
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Java-tisation of MULTOS The Goal
applet
Load mechanism
Card specific
loader
Card specific
loader
Same Terminal Functionality
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Our Contribution Context
• Meaningful contribution on viable terms:
– Intent for IPR terms to be normal GP practice, if at all possible
– Minimal pre-conditions or constraints
– At scope and level appropriate to GP
• CAMS terminology will be adopted
• ‘GP’ style technical authoring style to aid and speed review and debate in
working groups
• Timed to fit with next iteration of specifications
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