2

OUR COMPANY

Revenue 2013

$3.3 billion

Employees

10,000+

Countries with a site in

operation

43

OUR INNOVATION

Invested in R&D 2013

$193 million

Patents and patent

applications

4,300

OUR CUSTOMERS

Countries where we have

customers

190

Financial institutions

3000+

Dual listing on NYSE Euronext

GTO.PA Use Gemalto products and

services

2 billion Mobile operators

450+

eGovernment programs

80

Machines connected using

Gemalto technology

50 million

3

The Markets We Serve

EMV Overview

The Payment Ecosystem Before EMV

5

6

• Europay, MasterCard and Visa initiate the development of specifications for Integrated Circuit Cards aka the EMV spec 1994

• The first version of EMV specifications is published 1996

• EMVCo LLC is formed by Europay, Visa, MasterCard to manage, maintain and enhance the EMV™ Specification 1999

• 2004: JCB joins EMVCo

• 2008: The most recent version, EMV 4.2, is published

• 2009: American Express joins EMVCo

• 2013: Union Pay joins EMVCo

2000s

EMV Standards: A 20 Year History

Key Benefits of EMV

• Global Interoperability

• Enhanced Payment Security

Reduces the risks & costs relating to fraud

• Technology Platform for new payment channels

Contactless Payment

Mobile Payment

eCommerce

7

EMV chip cards

use an embedded

microprocessor

for payment

transactions

OUTSIDE

INSIDE

CONTACT

Secure chip stores payment information

Chip card authentication prevents

counterfeiting

Adds cardholder verification methods

Offers online or offline authorization

EMV contactless

payments –

simply tap the card

and pay securely

CONTACTLESS

PAYMENT

TERMINAL

2 inches

1 Technology 3 Consumer Payment Options

8

Mobile EMV = NFC

mobile payments –

provides secure mobile

payments, increased

loyalty and marketing

options for issuers

CONTACTLESS

PAYMENT

TERMINAL

NFC-enabled

phone

EMV contact –

card is placed into a

device that reads the

data on the chip Enter individual PIN

code. The card

checks the PIN

stored on the card.

The PIN may also

be verified online.

Sometimes PIN

is omitted and a

signature is

required. CONTACT PAYMENT

TERMINAL

Annual Fraud Losses on UK-Issued Cards

Source: MasterCard Analysis 2012

(Po

un

ds

MM

)

Source: http://www.financialfraudaction.org.uk 9

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010 2011

Card ID Theft

Counterfeit

Lost/Stolen

UK Fraud Migration

Source: http://www.financialfraudaction.org.uk 10

UNFCU Launches 1st US EMV Card Program in 2010

11

-30% in Fraud

+153% in Card Applications

+382% in Credit Lines Booked

+20% for Revolving Balances

+15% in Overall Purchases

EMV Adoption Map

12

?

U.S. EMV Migration Milestones

1 Liability for counterfeit transaction shifts to terminal owners if they don’t accept EMV

2 Liability for counterfeit transaction shifts to party who has least-secure support

13

2013 2014 2015 2016 2017

April 1, 2013 Visa & MasterCard

acquirer processors must support EMV

Transactions

October 1 2015 Visa & MasterCard fraud liability shift

for Point of Sale

October 1 2016 MasterCard fraud liability shift for

ATMs

October 1 2017 Visa & MasterCard fraud liability shift

for Automated Fuel Dispensers (AFD)

Aftermath of Recent Data Breaches

14

Breaches have created a tipping point in consumer and media

perception of payment security.

Securing the payment eco-system is now a matter of urgency.

U.S. Card Market Is Big

15

137MM

175MM TOP 2 US Banks

U.S. Card Market Is Really Big

16

450MM

568MM TOP 10 US Banks

US EMV Card Projections

17

2 9 25

200+

575

2011 2012 2013 2014 2015

EMV Capable POS Deployment Projections

18

4%

14%

35%

57%

70%

87%

2012 2013 2014 2015 2016 2017

Source: Aite Group

How it Works

%B5268xxxxxxxxxxxx^Smith/John^11012011660

4000000000000000000000?

;5268xxxxxxxxxxxx=11012011660400000000?

Magstripe Data vs EMV Data

20

Copy = Original

Original Counterfeit

Data stored on a magnetic stripe can be easily skimmed to make cloned cards

No way to verify card authenticity - cloned cards are indistinguishable from the

original

Signature is a weak form of cardholder authentication

000000000000000000083902014A200228830C8859DE1F37E74D8B657FB70D110108002C035400BA038001C0003200000E16181E20242A8488A8AEB2CADADC000000621C73100803

8400621C5A0808038400621C4108080384006216030003030000621DFA0008038400621F8804020480006214500002020000621084040204000062149500010480006205F500060480006

2116D00030200006212610003028000621CAC0008038400621E6600080384000000000000000000000000000000000062196B0062017B0062049C006206930062073C0062097D00620A1

800620A5E00620B3700620B3B00620E5F00620ECB00621EF50062218C006222350000000000000000000021E921AB21A721E521C2219E03800380043A0756075B07880C880080043A1

05A00C004BA185A057A5A000005FA005A000005FA005A05FA05FA00002020200005010100000110160600010000558988FFA00000000410100062000000000000000000000000000000

14145A1000000351080000005A554E2003040000EA60004E200F0000000000000000000000000000000000067A0A16051316232636000000000000005A83C13175E543256125AB0EE34

F54EAA431EA2AE557264CC12A1F6E868A268994000000000000000062E0D0833DB0F19D15DC4C706DE3BCAB0000000000000000A291D970A2C20DF76EE60E022CB646C10000000

0000000000000000000000000000000000000000000000000000000000000000000000000000000005AAD126F5A5A5A5A5A000000000000000000000000FF01000000000000000001000

05B6373B15ABED28E130038FCE57D5A752AD9B0CF98F50000000000000000241234FFFFFFFFFF00000000000000000000000000000000000000000000000000FFFFFFFFFFFFFFFF50

000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000A19F27019F02065F2A029

A039F36029F520600000000000000000000000000000000000000000000000000000000D55502F60200D6550295029F1455029D019F235502AA0100CA5502970600CB5502A40600C455

02FB0300C55502FE0300C35502F80300C95502910200D15502C3199F4F9503541100C85502930200945603042000825603010200C75502900100D35502DC1200D7550324039FA15502

AB069FA25502BD0600CD55032A0300CE55032D0300CF5503270300DE9502740900D95603332000D8560330029FA75503530100DA5602F20200DB5602F40200DC5602EE0200DD560

2F0028577C46B600E5D1ECC0FE9EB0F42B13E15FEA9F7479A0F3217C4BCD742108178D9FB07D11F32A2426098F1328BF92E6CCEF353D1FD4386C68DDD9B9EA1EEAB978E5B8B

3074BB128D07F50B207148DEAAD0C034B755ED83A38BD82B2A74D69CE1E65F0B9E7454BE9224FB65AA859BEA5DFBBEAB631A51FB1F5F54E16F3934C8DFC833A6A110158BAE3

217DEE096E409DD20FDFEF2EB6716CB23A71B42E318C23546F88BB9AECBF36390E569CBD1F5C5A3366CFDBAFBE54A29D4CC696DF2E60163D58950C8AF189BD38BEF90B0A9E

D4E0039204F1300E4457551C440BFAF41EB52D98E916DAE7F1DDB3779187FC869DF8CF99E0114A77AF8AF0EFF5226D5CF2D4F9E8C2A50FF6B6FD1E4AEFA2C2308570DB429258

FCEF9C40001761154F07A0000000041010500A4D41535445524341524400296F278407A0000000041010A51C500A4D4153544552434152448701015F2D02656EBF0C059F4D020B0A00

000000

Magstripe Data vs EMV Data

21

Original

Track 2 on chip ≠ Track 2 on Mag

(Chip CVV ≠ Magstripe CVV)

Chip dynamically communicates with authorization system or POS to guarantee

Card Authenticity, Cardholder Authenticity, Transaction Authenticity

Protects against Card Skimming, Card Cloning, & Man in the Middle Attacks

Verify the Card is Authentic

Verify the Cardholder is Authentic

Authorize the Transaction

How it Works

Source: EMVCo 22

What Does “Chip & Signature / Online Only” Mean?

Source: EMVCo 23

Verify the Card is Authentic Verification done via real time online communication with

Issuer

Uses dynamic data to prevent man in the middle attacks

Verify the Cardholder is Authentic

Authorize the Transaction Authorization done via real-time communication with Issuer

Pros & Cons of “Chip & Signature / Online Only”

Source: EMVCo 24

Pros Highest level of assurance of card authenticity

Can be deployed with basic, low cost EMV products

Cons Signature is a weak form of cardholder verification

Not compatible with Offline Point of Sale environments may

limit acceptance abroad

25

What Does “Chip & Pin / Online Preferring” Mean?

Verify the Card is Authentic Verification done via real time online communication with

Issuer OR

Offline Verification by POS using SDA or DDA

Verify the Cardholder is Authentic

Authorize the Transaction Authorization done via real time online communication with

Issuer OR negotiation with POS

26

Pros & Cons of “Chip & Pin / Online Preferring”

Pros Highest level of assurance of card authenticity

Universal Acceptance @ any Point of Sale environment

PIN provides strong cardholder verification

Cons Consumer confusion relating to use of PIN for credit

transactions

Dynamic Data Authentication (DDA) requires a specialized

EMV chip which are incrementally more expensive

Global Acceptance of Chip & Signature Cards

27

Online Point of Sale Environments

Offline / Unattended Point of Sale Environments

Global Acceptance of Chip & Signature Cards

28

Predominantly online point of sale environments

Canada Mexico Singapore

Global Acceptance of Chip & Signature Cards

29

Mixture of Online & Offline point

of sale infrastructure

Toll booths, train stations,

vending machine

30

“Dip & Wait” nature of contact EMV is not in line

with consumer & merchant expectation of

immediacy & convenience

Contactless EMV solves checkout speed issue

Contactless EMV helps capture cash

Contactless EMV increases cardholder stickiness

translating to issuer top of wallet

Contactless EMV creates a consistent

consumer experience between card and

mobile transactions.

Will Apple Pay drive merchant activation of

contactless POS?

31

Contactless EMV is in Mass Deployment Around the

World

32

435 Million NFC handsets forecasted

to be shipped in 2014

2 Million Contactless-enabled

Point of Sales

200m

295m

590m

+900m

2011 2012 2013 2014

Number of Dual Interface Cards Shipped between 2010 and 2014

40% Of all EMV cards shipped in

2014 were Dual Interface

+2 Billion Dual Interface Contactless Cards have been delivered

Barclays bPay for Festivals & Events

33

Get fast-track access into the event

Make fast and secure contactless payments

Unlock special experiences on the day

Keep on using your bPay band after the event at

hundreds of thousands of retailers across the UK

Contactless payments began on a card, but that’s no reason to stop there

34

“The brand says we only need the 4k chip, but the personalization vendor continues to push the 10k and the instant issuance

vendor says 12k. I have been getting the run around from all of my vendors”

- a frustrated VP of payment solutions

2015 © Gemalto

35

What type of EMV Card should I Buy?

What Payment Applications?

VSDC 2.8.1am2s

MChip Select

MChip Advanced

What Operating System?

Java

Multos

Native

How Much Memory?

4k

8k,

12k

What type of CVM?

SDA

DDA

CDA

36

What type of EMV Card should I Buy?

What EMV Profile?

Visa US Debit Profile

MasterCard Profile n

Color of Module?

Gold

Silver

How Many?

1000

10000

Type ?

Contact EMV

Contact + Contactless EMV

37

Adapt Your Card Artwork to EMV

38

Supply Chain And Manufacturing Capacity

Total Chip Card Shipments 2013

Rank Manufacturer/Headquarters Millions

1 Gemalto Netherlands 2,178.0

2 Oberthur France 930.0

3 Giesecke & Devrient (G&D) Germany 875.1

4 Morpho Germany 680.0

5 Watchdata System China/Singapore 401.1

6 Bluefish Technology Denmark 319.0

7 Beautiful Card Taiwan 252.5

8 AB Card Group Turkey 191.7

9 Asia Credit Card Production China 179.0

10 Jing King Tech Holdings Hong Kong 148.5

11 Exceet Card Group Germany 143.0

12 COS Software Co. China 115.0

13 Goldpac China 101.2

14 DZ Card Thailand 99.0

15 Valid Brazil 98.5

16 HID Global United States 90.0

17 CPI Card Group United States 76.6

Payment Cards with Chips

vs. Mag Stripes Only (mil.) 2013

Chip Magnetic Stripe

Gemalto

Perfect

Oberthur

G&D

CPI

Valid

Morpho

AB Note

IntelCav

Note: Chip cards include Visa, MasterCard, American Express, JCB, and Maestro cards with mag-stripes as well as ATM-only and domestic-only debit cards, transportation cards, and other proprietary cards. © 2013 The Nilson Report

645/150

2/643

280/280

322/233

15/350

30/247

101/52

13/135

47/78

Experience Matters Scale Matters Global Presence Matters

39

Comprehensive Portfolio of

Payment Products &

Services