1. Emerging technologies in payment industry
Erfan MORADIAN
November 15, 2015

2. Course Objectives
At the end of this course, you will know:
Different types of smart cards
What are differences between MIFARE family members
How and where to use each technology in payment solutions
The NFC business ecosystem, use-cases and secure element’s basics
How to secure e-banking and e-commerce authentication
The differences between Apple Pay and Android Pay
Why the world is migrating to EMV
What are the emerging payment technologies

3. Agenda - Part 1
Ubiquitous Commerce
Barcode Technology
RFID Technology
Magnetic Stripe Cards
Smart Cards
How to secure CNP
transactions?

4. Agenda - Part 2
Near Field Communication
BLE and its differences with NFC
Near Sound Data Transfer
Magnetic Secure Transmission
Mobile wallets overview
CryptoCurrency - Bitcoin story
What is EMV and why?
Wrap up, demo and innovation PITCHFEST

5. Ubiquitous Commerce

6. Computing waves
Mainframe Computers
Personal Computers
Networked Computing
Ubiquitous Computing

7. Ubiquitous Computing
Pervasive Computing
Ambient Intelligence
Calm technology
Many-to-many relationships
Connected smart products
EveryWARE

8. Ubiquitous Computing
Paradigm shift
Technology becomes
virtually invisible in our lives
Things that think

10. U-Commerce
E-Commerce
M-Commerce
V-Commerce
T-Commerce
W-Commerce
S-Commerce

11. Major
features
Ubiquitous
UniversalUnison
Uniqueness

12. Barcode Technology
Visual representation of an object’s
data
1D Barcodes (Linear)
UPC (Universal Product Code)
EAN13 (European Article Number)
2D Barcodes
QR (Quick Response)

13. 1D Barcodes - Symbologies
Character set:
Numeric
Alpha-Numeric
Full ASCII
Discrete/Continous
TWO-WIDTH/MULTIPLE-
WIDTH
SELF-CHECKING

14. 1D Barcodes - Types (Ex.)
Code 25, Interleaved 2 of 5
Wholesale, libraries International standard ISO/IEC
16390
EAN-13, International Article Number
Worldwide retail, GS1-approved – International
Standard ISO/IEC 15420
UPC, Universal Product Code
Worldwide retail, GS1-approved – International
Standard ISO/IEC 15420

15. 1D Barcodes - Types (Ex.)
Code 128
Various – International Standard ISO/IEC 15417
Intelligent Mail barcode
United States Postal Service

16. 2D Barcodes
Aztec Code
ShotCode
MaxiCode Data Matrix
Han Xin Barcode QR Code

17. 1. Quiet zone
2. Finder patterns
3. Alignment pattern
4. Timing pattern
5. Version information
6. Data cells
QR Codes’ anatomy

18. Advantages
More information
Fewer errors
Easier to read
Easy to transmit
More secure
Customizable

26. Smart Sunny Sale Campaign

27. Barcode Generator Sites
http://www.waspbarcode.com/
barcode-maker
http://keremerkan.net/qr-code-
and-2d-code-generator/
http://generator.barcoding.com
http://goqr.me
http://www.qr-code-
generator.com
http://www.qrstuff.com

28. QR Codes in payment applications
1. Barcodes with payment
card information via mobile
apps
2. Mobile as barcode readers
for payments
3. Barcodes on invoices for bill
payments
4. Barcodes to load-up your
mobile wallet or engage in e-
commerce

29. HOW DOES A QR CODE PAYMENT WORK?
INDIVIDUAL-TO-LARGE
BUSINESS
TRANSACTIONS
INDIVIDUAL-TO-SMALL
BUSINESS
TRANSACTIONS
INDIVIDUAL-TO-
INDIVIDUAL TRANSACTION
(PEER-TO-PEER)

30. PayConnect Demo

31. RFID Technology
Radio Frequency
Identification
Communication via
radio waves
Being used in different
industries

32. RFID Technology
RFID Tag
RFID
Reader

33. RFID read distance
Read Distance
Active/
Passive
Antenna
Design
Radio
Frequency
Up to 300 meters!

34. RFID Tag types
Passive
Without internal power
supply
Active
With internal power
supply

35. RFID Tag types
2.4-6 GHz
(Typically
2.45 or 5.8
GHz)
Microwave
400-1000
MHz
(Typically
850-950
MHz)
Ultra-High
Frequency
10-15 MHz
(Typically
13.56 MHz)
High-
Frequency
100-500 KHz
(Typically
125-134 KHz)
Low-Frequency

36. Magnetic Stripe Cards
Magstripe Cards/Swipe
Cards
Two types:
High Coercivity (HiCo)
Nearly black
Low Coercivity (LoCo)
Light Brown

37. Magstripe card standards
ISO Number Description of Standard
7810 Physical Characterisitics of Credit Card Size Document
7811-1 Embossing
7811-2 Magnetic Stripe - Low Coercivity
7811-3 Location of Embossed Characters
7811-4 Location of Tracks 1 and 2
7811-5 Location of Track 3
7811-6 Magnetic Stripe - High Coercivity
7813 Financial Transaction Cards

38. Magstripe Tracks
Track
Number
Recording
Density
(bits per
inch)
Character
Configuration
(including parity bit)
Information Content
(including control
characters)
Track 1 210BPI 7 bits per character
79 Alphanumeric
characters
Track 2 75BPI 5 bits per character 40 Numeric characters
Track 3 210BPI 5 bits per character 107 Numeric characters

39. Caja Madrid VISA-Example

40. Smart Cards
A card that includes an
embedded integrated circuit chip
(ICC)
With or without contact
(contactless)
Store information in a secure way
Carry out local processing
Perform complex calculations

41. Smart Card types

42. Smart Card function Trade-Offs

43. Smart Card Standards
ISO/IEC
7816
14443
15693
Java Card & MULTOS
GlobalPlatform
GSM
EMV
Common Criteria
FIPS

44. MIFARE family
NXP Semiconductors-
owned trademark of
contactless smart cards
ISO/IEC 14443 Type A
13.56 MHz

45. MIFARE family
MIFARE Classic
MIFARE Ultralight
MIFARE Ultralight C
MIFARE DESFire EV1
MIFARE DESFire EV2
MIFARE Plus

46. Hybrid Cards
Two chips: contact and
contactless interface
Two chips are not
connected

47. Dual Interface Cards
Single chip with a
contact and contactless
interface
Can access the same
chip via a contact or
contactless interface,
with a very high level of
security.

48. How to secure CNP transactions?

50. One-Time Passwords
Unique password which can only
be used once
Valid only for a limited time period
OTP Algorithms
Time Based
Mathematical Algorithms
previous password-
based(event based)
challenge response-based

51. Dynamic Code Verification

52. Dynamic Code Verification-
Architecture

53. Near Field Communication

55. Near Field Communication
Short range Communication
High frequency: 13.56 MHz
Low bandwidth (Data transfer
speed): 106, 212, 424 kbps
Different operating modes
Reader/Writer
Peer-to-peer
Card emulation

56. Types of communication in
NFC Technology
NFC enabled mobile phone, NFC enabled mobile
phone
NFC enabled mobile phone, NFC reader
NFC enabled mobile phone, NFC tag

57. Standardization organizations
NFC Forum
GlobalPlatform
GSM Association (GSMA)
ISO/IEC
ECMA International
ETSI and ETSI Smart Card Platform (ETSI SCP)
Java Community Process (JCP)
Open Mobile Alliance (OMA)
3rd Generation Partnership Project (3GPP)
EMVCo

58. General Architecture of NFC
Enabled Mobile Phones

59. Secure Element
Embedded Hardware
Secure Memory Card
UICC
Host Card Emulation

60. Trusted Service Manager
An independent party serving the
other actors of the NFC
ecosystem
A service platform that acts as a
bridge between
financial institutions
mobile network operators
and other ecosystem players
To enable mobile commerce

61. TSM functionalities
End to end security
Activation and deactivation of services
Remote access to applications
Interconnect with Mobile Network Operators and Service
providers
Application lifecycle management
Managing keys for a trusted execution environment

62. Over-The-Air
Technology used to communicate with, download
applications to, and manage a SIM card without being
connected physically to the card.

63. OTA technology components
A back end system to send requests
An OTA Gateway to process the requests in an understandable
format to the SIM card
An SMSC to send requests through the wireless network
A bearer to transport the request: today it is the SMS bearer
Mobile equipment to receive the request and transmit it to the SIM
card
A SIM card to receive and execute the request

64. OTA Architecture

65. NFC Ecosystem without TSM

66. NFC Ecosystem with TSM

67. SE Comparison

68. Technologies comparison

69. Tesco-Demo

70. Bluetooth Low Energy
Bluetooth SMART
Same 2.4 GHz RF as
Classic Bluetooth
Simpler modulation
system
One to many
Location services

76. Near Sound Data Transfer
Patented by Tagattitude
Sound-based mobile transaction technology
Uses one time password sent through the audio
channel of a mobile device to create an electronic
signature enabling secure transactions.
Being used for mobile banking transactions

77. Near Sound Data Transfer

78. Magnetic Secure
Transmission
Patented by LoopPay
Does not require merchants
to make changes to their
existing payment systems.
Emulates the same
magnetic field as Magstripe
card
Works within 3 inches ~8
centimeters

79. Mobile Wallets Overview
VS.

83. Cryptocurrency-Bitcoin story

84. Cryptocurrency-Bitcoin story

85. What is EMV?

86. What is EMV?
EMV Integrated Circuit
Card Specifications for
Payment Systems
Developed jointly by
Europay, MasterCard and
Visa in the mid-1990s
Developed jointly by
Europay, MasterCard and
Visa in the mid-1990s

87. What is EMV?
Consumer payment application is resident in a secure Integrated Circuit
Card (ICC) or chip
Contact chips in smart cards
Contactless chips in smart cards or personal devices such as smart
phones
Chip key features
Store information
Perform processing
Secure element which stores secrets and performs cryptographic
functions

88. Why EMV?
Protect against counterfeit fraud through authentication
of the chip card, smart phone, fob etc
Risk management parameters to reduce the risk of
unauthorised payment
Validate the integrity of the transaction through digitally
signing payment data
Reduce lost and stolen cards through robust cardholder
verification methods in all acceptance environments

89. EMVCo and other standard bodies

90. Worldwide EMV Deployment and Adoption

91. For more detailed information, please contact me:
www.linkedin.com/in/erfanmoradian