Multi-Application Strategy

Johan RasVisa International

21 August 2002Toronto, Ontario, Canada

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The Future of Universal Commerce – Anytime, Anywhere, Anyway

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Delivering Universal Commerce through Smart Card Technology

Ensuring customer service quality through global chip standards

• EMV, CEPS and GlobalPlatform

Establishing baseline infrastructure by implementing Visa Smart Debit/Credit in national markets

• Support Debit/Credit chip migration to reduce fraud

Enabling development and support of value-added services that drive payment volume and help Members take advantage of business opportunities

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Vision for Multi-application Smart Cards

The multi-application smart card offers a variety of benefits to Visa Members, merchants and cardholders…

Merchant Benefits

• Point of access efficiencies

• Reduced costs

• Foundation for customer loyalty programs

Cardholder Benefits

• Greater utility

• Customized usage

• Convenience

Member Benefits

Improved risk and fraud management

Enhanced cardholder verification

Reduced online authorization costs

Cardholder acquisition and retention programs

Volume increases

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The Challenge and the Goal

Meet the needs of everyone; Issuer, merchant and cardholder…

Credit or Debit Payment

Card Management

Merchant

Loyalty Program

Development

Loyalty Program

Management

Card-holder

Merchant Selection

Personal Information

Management

The approach must enable Issuers to strengthen the relationship with their customers by delivering valuable utility at the lowest level of effort.

Issuer

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Driving Support for Multi-Application Smart Cards

Establishing GlobalPlatform as the preferred multi-application platform for Visa Members

Leveraging GlobalPlatform Java Card technology in the marketplace

Furthering strategic partnerships to improve the business case and speed implementations through Visa Global Smart Partner Program– Cost-effective GlobalPlatform

cards and support systems– Each region working with value

added service vendors for local market needs

Setting standards with industry organizations (e.g. IATA)

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Visa Low Cost Smart Card Program

Max Price (US$) white plastic

Fun

ctio

nalit

y

Java / OP Triple DES 48k ROM 16 E2

Global Platform

OP DES/16

Java / OP Triple DESPublic Key64k ROM16k E2

Global PlatformOP PK/16

Global Platform

Combi cardOP DI/16

Java / OPTriple DES Public Key Contactless 64k ROM16k E2

Single appVSDC DES

SDA DDA

Single appVSDC – PK

$2.70(was $2.89)

$3.37(was $3.56)

$3.91(was $4.67)

$0.99 $1.99

SDASDA

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Most Common Multi-application Smart Card Programs Today

VSDC

• Credit or debit payment product

Issuer Managed Loyalty

• Points

• Discounts

• Coupons

Secure Access

• Proprietary web site

Convenience storage

• URL

• Mailing address

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Multi-app Project Highlights

Key drivers: new business opportunities, multi-application, threats from competitors

ANZ began converting Visa credit card portfolio to chip in November 2001 and introduced Secure Internet shopping

Products: “FIRST” in Australia, “ZED” in New Zealand

Approximately 1 million GlobalPlatform cards and 50k POS devices by end 2002

Australia

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Multi-app Project Highlights

Five credit card issuers co-branding with SK Telecom to offer dual interface cards with VSDC payment and contactless transit

Can also be used in dual-slot mobile phones

Expected to issue approximately 2 million cards in next 12 months

Discussions underway to migrate existing transit cards to the GlobalPlatform dual-interface cards in Seoul and Pusan

Korea

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Multi-app Project Highlights

smart Visa issuance – 10 MM cards issued by end 2001

– Over 12 MM cards projected by end 2002

– 15–20% of all Visa cards by 2006

4 Members issuing cards– Target began issuing in Nov. 2001

– Will begin acceptance by end 2002

Approximately 3-4 more banks expected to implement

Focusing on chip acceptance at POS and developing smart Visa Rewards loyalty program

U.S.

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Projecting 70+ Million Visa EMV Smart Cards by end 2002

LAC850K

CEMEA250K

AP10.5MM

Canada12K

EU50MM

US 12MM

Thank you

Johan RasVisa International