Contactless RF Payments

Delivering Merchant and Consumer Benefits

Trevor Pavey

Texas Instruments

Card Industry - Historical Overview

The radio waves are generated by the reader’s antenna.

A tag in the RF field uses energy from the radio waves to respond to the reader’s commands

Contactless Payments – Wave and go…

TI-RFID: 15 Years of Innovation

• RFID provider since 1989• Leading transponder

supplier• Approaching 500 million

tag milestone– 150 million keys for anti-

theft

– 60 million in livestock tracking

– 25 million library books

– >8 million using Exxon/Mobil Speedpass

– >4 million trays tracked by Marks and Spencer

ExxonMobil’s Speedpass

• More than 8 million active members

• More than >8900 locations in the US

• Operational for more than 8 years.

• Keyfob most popular form factor

Source: NACS online, Mar 2005

American Express ExpressPay

• Pilot launched in Phoenix in July 2003

• Nationwide launch June 1, 2005

• Many well-known brands -- Carl's Jr., CVS, Dairy Queen, Kwik Kopy Printing, Quiznos Subs and Schlotzsky's Deli

• Announced CVS Pharmacy as first national merchant

• Results measured: Transaction speeds averaging 12.5 seconds– 63% faster than cash – 53% faster than card

transactions

Consumer Benefits

• Faster than Cash or Credit

• Increased Convenience - Wave and Go

• No Fumbling for Cash

• Reduced Queues

• Automated CRM Promotions

• Improved Satisfaction with More Targeted Offers

• Loyalty Rewards

Merchant Benefits

• Reduced Transaction Time and Queues • Faster than Cards and Cash

• Increase spend on traditional cash transactions

• >40% increase in cafeteria pilots

• Simplifies Reconciliation• Minimizes Cash Shrinkage• Safer, More Secure Transactions• Enables Consumer Identification for CRM

Contactless Payments – How secure is the transaction?

Equipment being installed on front of existing bank

card slot

The equipment as it appears installed over the normal ATM

bank slot.

Magstripe Fraud

The RF Payment Ecosystem

RF(ID) layer

The RF Interface and Security...

Physical 13.56 MHz RF Communications

ISO 14443 – 2 A&B

ISO 14443 – 3 A&B

ISO 14443 – 4 A&B

Security & Application layers

e.g.ExpressPay Paypass

Physical Layer Physical Layer

Data Link Data Link

Application ‘Interface’

Application ‘Interface’

Application ‘library’

Application ‘library’

Session Session

SecurityAccess

SecurityAccess

Application Application

Tag Reader

Contactless Payments Security

The secure IC embedded on the payment token uses dynamic data encryption which changes after every transaction.

The encryption solution uses the worldwide standard 128-bit triple DES algorithm.

< 4cm

Acceptance Is Rapidly Growing

Blue from American Express launched nationally on June 1st

“Blink” launched 1MM cards in Atlanta and Denver with Visa and MasterCard

Launched Philadelphia Eagles co-brand card with MasterCard

Launching nationallyLaunching nationally5,300 store rollout5,400 store rollout11,000 store rollout500 store rollout200 store rollout

Unlimited form factors

Contactless RF Contactless RF PaymentsPayments

Delivering Merchant Delivering Merchant and Consumer and Consumer BenefitsBenefits

Presented By:Presented By:

Trevor PaveyTrevor Pavey

Texas InstrumentsTexas Instruments