NFC Contactless Payment – PCI / EMV Security Standards

Contactless payments, thanks to their ease of use, are becoming part of our everyday lives. Digital payments comprised of online, mobile, and contactless cards are expected to hit $3,6 trillion in transactions globally this year. The global value of contactless payments is expected to hit $500 billion annually in 2017 from an expected $321 billion at the end of 2016.

 

 If today this trend is confirmed in an increasing number of debit, credit, and prepaid cards, their generalization is already programmed in mobile phones. More than that, mobile phones can contain the information of several contactless cards in a virtual “purse”. Before making a payment, it is up to you to choose the card that you prefer to use.

 

In this logic, most bank cards are equipped by default with an RFID / NFC chip that makes it possible to make payments without having to enter its PIN code but simply by approaching it to the payment terminal.

 

Security cards and concerns

 

Obviously, when we talk about payment and storage of sensitive information, security is an important factor. Therefore, contactless card payments have the same features as the traditional smart card and PIN code, and the transaction process takes place via the same secure networks. Contactless payments by mobile phone also benefit from comparable security features.

 

For additional security, your bank can set a limit on expenses that you can do without using a PIN, mobile code, or fingerprint for verification purposes. For transactions above this limit, you are asked to enter your PIN, and mobile code or use the fingerprint reader on your mobile phone. Although low-value contactless payments typically do not require a PIN to be entered on the payment terminal, you may be required to do so after a certain number of transactions to verify your identity and prevent fraud. Plus, European legislation limits the liability of the consumer to 150 euros in case of fraudulent or undesirable payments. This ceiling should be lowered by the end of January 2018. Consumers may even be better protected by national legislation. In addition, payment service providers can offer their customers better protection or even full protection in the case of fraud.

 

Together with all these precautions, you should always take the necessary steps to keep your PIN or mobile code and any other safety information in a safe place. Inutile to say that if your card or mobile phone is lost or stolen, you must notify your payment service provider (ie the bank or card issuer) as soon as possible.

 

PCI / EMV Regulatory and Security Standards

 

Here below are listed the PCI (payment card industry) and EMV (europay mastercard visa) Security Standards which are set to better protect merchants and buyers, in this digital age, from financial fraud.

 

a)      PCI / DSS Standard:  

 

Major international card organizations introduced the PCI DSS (Payment Card Industry Data Security Standard) in 2004 to enhance the security of card payments and protect traders and cardholders against data theft. This standard is constantly evolving to respond to threats, and its current version, 3.1, expires on 31/10/2016.

To comply with the standard, card processors, service providers, and merchants are required to comply with 12 requirements. The requirements are the same since the standard was created but are divided into sub-conditions that evolve with the versions. Click here for more details.

 

b)      The EMV standard

 

EMV (stands for Europay, Mastercard, Visa) is a technical standard that optimizes the security of card payments and data transfer. Data transfer and authentication intercede via the microprocessor of a chip. The debit and credit card data are stored twice: on the magnetic stripe and on the chip. If the payment terminal is equipped with a chip reader, authentication is done automatically via the EMV chip and not via the magnetic tape, which is now technically out of date.

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This standard has now been adopted by virtually all credit card organizations and implemented in more than 80 countries. While the EMV compatibility of cards has rapidly spread to Europe, it has taken much longer to become established in the United States. Credit card fraud has therefore become massively displaced, proof that this standard is indeed effective for security.

 

The EMV standard consists of 4 books, all of which contain specifications for chips used in payment systems:

Book 1: interface requirements between the card and the terminal independent of the application.

Book 2: security and management Key Features

Book 3: Application Specifications

Book 4: Cardholder, Attendant, and Acquirer Interface Requirements

 

The current version is 4.3 and was released in November 2011. While the EMV standard is virtually unchanged, which indicates its level of maturity, it is on the other hand extended by several others which are still fairly regularly updated. Click here for more details.

 

c)       The EMV Contactless Standard

 

This is an extension of the EMV standard, so it relies on all the specifications that make up the chip, and its specifications relate to the used terminals.

The EMV Contactless standard consists of 4 books:

 

Book A: Architecture and general requirements

Book B: Entry point

Book C: Kernel 7 specifications

Book D: EMV contactless communication protocol specifications

 

This standard brings together the NFC, which deals with how the devices communicate, and the EMV standard, which deals with how payment is made. It provides for the use of a card (equipped with NFC) or a smartphone. However, the case of using an NFC card does not entirely correspond to the definition of the contactless payment as set out in the introduction, since it recommends introducing the card into a terminal which communicates without contact with the reader responsible for performing the transaction (payment). In the EMV Contactless standard, communication is done in peer-to-peer mode.

 

d)      3D Secure

 

The 3D Secure (D for Domain) is also derived from the EMV, and has been made necessary to answer a problem with Internet payment on e-commerce sites. It addresses the problem of verifying that the person making the payment is the holder of the payment card.

•The client selects the type of card and communicate the card number, expiration, cryptogram

•The system verifies that the card is enrolled in 3D Secure

•If the card is accepted, the client is redirected to the site of his bank which sends him a code to validate his purchase

•The system records (for the log sent to the e-merchant)

NB: If this standard does not concern contactless payment, its presentation is interesting in the context of online shopping.

#NFC-Technology: Discover the Value of NFC Application For Your #InternetOfThings

Smartphone is increasingly present in our environment. For many of us, it wakes us up in the morning, allows us to know how to dress after checking the weather, accompanies us in transportation, allows us to stay in touch with real world and many other activities related to each of us. In addition to that we are purchasing more and more products and services with our smartphones and our interaction is growing with our environment, home, car or city. And as you know, all this carries the generic name of IOT.

 

With performing all the previously mentioned activities, we leave our traces on the Internet. We leave information on different social medias. Only with the simple use of Gmail, free for the user, we give authorization to Google to use the information contained in our emails. By comments on blogs, on Amazon, on TripAdvisor, on Twitter, pictures on Flicker or Instagram, we therefore share much more information than we think, again, more or less voluntarily, and all this is enriching databases under the generic term of big data. This information is making the economic happiness of many companies, the first being Google, Apple or Amazon. This IOT is mainly an Internet of the data, we give our data that is recovered and exploited by others.

 

As more things are getting connected, concerns over data privacy and security are growing. Using NFC as a communication method can help resolve some of these concerns.

 

This is where the NFC comes in.

 

NFC (=Near Field Communication) technology was born thanks to the coupling of RFID (Radio Frequency Identification Technology) with smart cards. RFID is a contactless identification system that has been used for a long time for traceability purposes. It enables simplified transactions, data exchange, pairing, wireless connections and convenience between two objects when in close proximity to one another (about 10 centimeters). Because the communication is one-to-one and requires such close proximity, data privacy is more inherent that with other wireless approaches.

 

The choice of NFC technology on mobile phones is guided by several motivations related to the consumer use of the mobile phone at the present time and by various types of NFC applications conceivable in the field of mobile banking, creative marketing, health. Indeed, in recent years the integration of several technologies (4G, 4G+ networks, GPS, NFC, etc.) into the mobile phone has transformed it into a multiservice tool that cannot be ignored in our daily lives.

 

Today, NFC technology is gaining interest from manufacturers, particularly those in the telephony, IOT and sensors sector, who have integrated it into many consumer Smartphones. There are many applications ranging from electronic payment to time-stamping and localization.

 

Communication Modes of NFC:

 

NFC has 3 communication modes: Card emulation mode, The reader mode and Peer-to-Peer.

Card emulation mode: In this mode, any NFC enable device, can be used to make transactions instead of using any contactless card. In the case where the NFC enable device is a compatible mobile phone, the SIM card of the operator can be used as a security element by storing encrypted information. There are many different sort of card-type applications, such as, contactless payments, identification card, loyalty card, access control, motel pass cards etc.

 

The reader mode : The mobile terminal becomes a contactless card reader (active mode) or “radio labels” (electronic tags). This mode allows you to read information from various NFC-enables smart objects, only by approaching your mobile phone in front of electronic tags placed on the street, on bus shelters, monuments, posters … or on packages, products = smart advertising. Not only reading but it’s also possible to write information to these smart information sources using the right NFC enabled device.

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Peer-to-Peer Mode: This mode allows two NFC enabled devices to exchange information, such as vCards, photos, videos, tickets, etc. A device with NFC technology is capable of exchanging information with contactless smart cards but also with other devices equipped with this technology. In peer-to-peer mode, one of reader/writer behaves as a tag, creating a communication link. Using NFC in this mode is equal to having a secure network in your pocket that you can use in any location with peace of mind.

 

 

Study Case: Hotel Room Access

 

Let’s take a first mobile phone user, who usually travels and book hotels for his stay. This person has a SIM card in which an NFC application is installed. His mobile operator, in Belgium, told him that he could access NFC devices thanks to his SIM card because it has a SIM-Centric technology.

 

Our user thus travels on business in different regions of Belgium. The hotels in which he stays ask him to pass his phone in front of a terminal in order to obtain a digital key. So, his phone can be used as a key.

Afterwards, our user goes to a conference in Germany and also wants to check-in in a hotel room. At the time of registration, the reader accepts his SIM card but informs him that his operator will charge him a fee due to this service outside Belgium.

 

Upon returning from the conference, the user asks his operator to change the billing-plan so that he does not have to pay any fees in the future and the operator tells him that this is impossible because at the moment the service costs the operator.

 

In another case our user could book his hotel room online. He would then receive on his mobile phone an electronic key that would be valid throughout the stay and that, when used with the NFC chip and the appropriate application, would allow him to access his room by presenting the mobile in front of the door equipped with an NFC reader.

 

The Clarion Hotel in Stockholm, helped consumers to access directly their rooms and avoid queues by replacing all room keys in 2011 with digital keys for customers already equipped with NFC devices. Same approach for check-out, made with a simple touch between their phones and the lobby reader. 60% of users said they had saved more than ten minutes and 80% would use the system again if they had the opportunity while the hotel was able to reassign check-in staff while removing keys replacement problems.

 

Transport users already use their phones as boarding passes and we witness NFC payment systems in restaurants, taxis, shopping malls or distributors. In hospitals, offices, university campuses, we can use our phones to enter buildings, make purchases, use transportation and identify ourselves. NFC phones is even being used to provide physicians with access to your medical history.

 

Industry experts predict that the NFC will continue to revolutionize our lives in the years to come. Our daily checklist – “keys, wallet, phone” – is about to shorten. It will not take long before you see the functionality of these three objects integrated into an NFC compatible handset.

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#CloudComputing: Fix The Present Before You Plan The Future

Cloud computing is leading to a major transformation in the terms of digital technology by companies in all economic sectors. The associated challenges relate not only to activity and job creation among digital players, but also to a competitive gain that can be realized by all user companies.

 

The cloud computing model consists of providing remote and on-demand computing resources, infrastructure, platforms or application software. The advantages in terms of cost reduction and ease of access lead to this rapid adoption, which results in a gradual but decisive change in the information systems, activities and related markets.

 

However, complexity and lack of integration is slowing down companies’ adoption of the cloud, according to a study conducted by Oracle on the EMEA area. The wide gap between central IT and the rest of the organization is directing many companies towards a bad approach of the cloud.

 

While many European companies are adopting the Cloud Computing, nearly half of them are facing difficulties due to increased integration costs and data storage. One of the main reasons for this situation is that more than 60% of a company’s total IT spending is now directly managed by the different business units, instead of IT department, which prevents companies from benefiting from cloud services to which they subscribe to. To avoid these problems, IT department must be the one responsible for providing the funds to keep other departments running. Because the budget is an important tool for identifying and executing the IT initiatives that are crucial to each department, therefore it should be well discussed between IT department together with CIOs.

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Study also revealed that organizations continue to finance their IT investments without taking into account potential revenue and innovative projects: 2/3 decision-makers claim that funding their IT is too traditional and penalizes innovation, and 1/3 decision-maker admit that the IT funding models of their organization are hindering IT innovation. As IT budget can be divided across various categories, depending on the complexity and sophistication of your company/department and its structure, it must reflect benefits of IT strategy. For example, if you’ve been communicating a strategy of migrating to the cloud and highlighting the operational savings, you should reflect those advantages and use them as justification for budget allotment.

 

Companies need to rethink their IT financing models and undertake a profound cultural transformation in order to fully exploit all the benefits of the cloud. 33% of respondents say that an inadequate model of IT funding is currently penalizing their business. 33% are also convinced that their company’s IT culture is insufficient for the cloud age. As a result, 72% of respondents say that a new cloud financing model will allow IT to offer more cloud services to the company, and 70% say it will allow the company to reduce its costs.

 

Problems that companies are facing in cloud computing adoption are less about technology but it’s about the difficulties of synchronization between the different business units. Managers of each department are increasingly making cloud purchasing decisions without involving the CIO or the IT department advice, especially because these purchases are very easy to make. So to be successful with digital business transformation and optimization, CIOs and leaders must brainstorm and communicate the strategy to allow IT spending and functional resource costs to be connected to business processes, outcomes and goals. By developing multiple views of the IT budget and resource allocations per department they can provide a better IT service supply on demand.

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