Chip Card Profile Business Considerations

Select the Options
Right for Your Business

Answer these four business questions for Credit products:

1. Do you want to issue cards supporting MasterCard Contactless?

Contactless support leads to the creation of a dual interface card. This is a chip card that can perform both EMV contact and contactless transactions. contactless brings speed and convenience to checkout, helping drive cardholder spend.

Learn more.

Benefits:

  • Contactless brings the speed and convenience of Tap & Go contactless transactions to both low- and high-value transactions
  • Greater flexibility for payments of any amount, even low-value purchases currently made with cash
  • Boost cardholder satisfaction with speedier checkout at POS
  • Enables ultra-fast transactions such as transit
  • A lift in overall spending across all spend segments is correlated with contactless adoption1

Considerations:

  • Requires additional steps to be prepared and personalized
  • Additional card cost to implement, such as the cost of the chip and personalization

Benefits:

  • Personalization is simpler and cheaper

Considerations:

  • Acceptance could be limited in specific environments such as transit
  • Without the speed and convenience of contactless, capture fewer low-value cash transactions on card
1. Tap-active accounts vs. control, U.S. consumer credit, 12 months after adoption. MasterCard Advisors, U.S. PayPass Adoption Study, April 2012.

2. Do you want to issue cards supporting offline acceptance?

Most transactions are completed with online authorization, but the cardholder experience and transaction revenues will be maximized if secure offline acceptance is supported.

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Benefits:

  • Widens acceptance opportunity and new environments, such as on board an airplane or train, parking, or vending
  • Transactions can be completed when an online authorization cannot be completed for technical reasons
  • Transactions completed at offline-only, unattended terminals (CAT3)
  • Better cardholder experience
  • Faster transaction speeds possible
  • Prerequisite for ultra-fast payments, such as transit

Considerations:

  • Requires the keys and certificates for offline CAM to be prepared and personalized on the cards
  • Increased card cost

Benefits:

  • Personalization is simpler and cheaper

Considerations:

  • No acceptance in some environments

3. Is your host system able to process chip data?

Early issuance of EMV chip cards may be focused primarily on maximizing international acceptance and meeting the chip liability shift. However, one of the key benefits of chip is its highly secure online authentication. Based on the abilities of the issuer's host system there are two types of issuers.

  • Issuers that receive and process chip data during an authorization request are referred to as Chip Grade issuers. They can use the chip data to improve risk management during authorization decisions.

  • Issuers that do not validate chip data are referred to as Magnetic Stripe grade issuers. They do not have the capability to process any chip data, and therefore cannot use that data to improve their authorization decisions.

There is, however, an alternative method to achieve the benefits of a Chip Grade issuer without having to fully implement chip data processing on the issuer authorization host system. An issuer can achieve this by using MasterCard M/Chip Processing Services.

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(Processing will be Chip Grade)

Benefits:

  • The authorization host can detect genuine cards based on the unique cryptogram
  • Major benefits in fraud reduction, cost savings, and consumer confidence
  • Card cost not impacted, since all chip cards have the capability built in

Considerations:

  • Chip Grade processing requires development at the issuer host to validate the cryptograms and other chip data received
(Processing will be Magnetic Stripe Grade)

Benefits:

  • Enhanced security can be added in the future

Considerations:

  • Limited security benefit from introducing chip
  • Magnetic Stripe Grade processing should be considered a transitional step and issuers should plan to implement chip grade processing as soon as possible

4. What is your preferred method of cardholder verification at the POS?

PIN-preferring MasterCard cards can reduce lost and stolen fraud losses and reduce operational costs by eliminating the need for retrieval requests and a number of chargebacks. Cardholders may also feel more secure using PIN to verify their transactions.

Learn more.

Choose one of the following methods:

Benefits:

  • Simple personalization
  • Low cost
  • Cardholder familiarity
  • Offline benefits of chip can be achieved

Considerations:

  • No fraud protection
  • No cost saving due to less exception processing
  • Potential risk of suboptimal cross-border acceptance experience

Benefits:

  • Good fraud protection
  • Simple personalization
  • Low cost

Considerations:

  • Risk of declines if terminal cannot connect
  • Forces all transactions online at online PIN terminals
  • No lost and stolen fraud protection at offline-only terminals
  • Will result in signature transactions in offline PIN–only markets (such as Canada, the United Kingdom, and France, for example)

Benefits:

  • Maximum fraud protection in all environments
  • Maximum cross-border acceptance
  • Facilitates viable IVR PIN management solution

Considerations:

  • Cost and complexity of personalizing offline PIN
  • Cost and complexity of initial cardholder PIN choice and PIN synchronization

Benefits:

  • Maximum fraud protection in all environments
  • Maximum cross-border acceptance
  • Offline benefits of chip can be achieved

Considerations:

  • Cost and complexity of personalizing offline PIN
  • Cost and complexity of initial cardholder PIN choice and PIN synchronization
  • Does not facilitate easy PIN management solution

Benefits:

  • Good fraud protection in all environments
  • Maximum cross-border acceptance
  • Offline benefits of chip can be achieved

Considerations:

  • Cost and complexity of personalizing offline PIN
  • Cost and complexity of initial cardholder PIN choice and PIN synchronization
  • Does not facilitate easy PIN management solution