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116-548: EMV is a payment method based on a technical standard for smart payment cards and for payment terminals and automated teller machines which can accept them. EMV stands for " Europay , Mastercard , and Visa ", the three companies that created the standard. EMV cards are smart cards , also called chip cards, integrated circuit cards, or IC cards, which store their data on integrated circuit chips, in addition to magnetic stripes for backward compatibility . These include cards that must be physically inserted or "dipped" into

232-426: A PIN can be added to a Complex Card. Complex Cards used to provide account information have been developed for: The latest generation of battery free, button free, Complex Cards can display a balance or other kind of information without requiring any input from the card holder. The information is updated during the use of the card. For instance, in a transit card, key information such as the monetary value balance,

348-722: A 10% discount on purchases made from the NHL's online store using Discover. In 2011 and 2012, Discover participated and won the Grand Marshal award for excellence in creative concept and design in the Tournament of Roses Parade in Pasadena. From 2011 to 2013, Discover was the sponsor of the college football Orange Bowl. In 2013, Discover was the sponsor of the BCS National Championship. In 2017, Discover

464-662: A Discover or American Express card if they issued a Visa or MasterCard. Within days of the court ruling, Discover filed a lawsuit in federal court seeking damages from Visa and MasterCard. In October 2008, DFS was awarded $ 2.75 billion in damages, the third largest settlement at the time in U.S. history. Shortly after the Supreme Court ruling, Discover struck its first deal to have its cards issued by another financial institution, GE Consumer Finance , which began to issue credit cards for retailer Walmart and its wholesale warehouse stores, Sam's Club . Transactions were processed on

580-410: A French financial institution. This pilot featured acoustic tones as a means of authentication. Although Complex Cards were developed since the inception of the smart card industry, they only reached maturity after 2010. Complex Cards can accommodate various peripherals including: While first generation Complex Cards were battery powered, the second generation is battery-free and receives power through

696-589: A capacitive keyboard requires constant power, therefore a battery and a mechanical button are required to activate the card. The first Complex Cards were equipped with a buzzer that made it possible to broadcast sound. This feature was generally used over the phone to send identification data such as an identifier and one-time passwords (OTPs). Technologies used for sound transmission include DTMF ( dual-tone multi-frequency signaling ) or FSK ( frequency-shift keying ). Companies that offered cards with buzzers include: Discover Financial In 1981, Sears purchased

812-481: A card and reader. They are becoming more popular for payment and ticketing. Typical uses include mass transit and motorway tolls. Visa and MasterCard implemented a version deployed in 2004–2006 in the U.S., with Visa's current offering called Visa Contactless . Most contactless fare collection systems are incompatible, though the MIFARE Standard card from NXP Semiconductors has a considerable market share in

928-615: A card, they are unable to make fraudulent purchases unless they know the PIN. Chip and signature, on the other hand, differentiates itself from chip and PIN by verifying a consumer's identity with a signature. As of 2015, chip and signature cards are more common in the US, Mexico, parts of South America (such as Argentina and Peru) and some Asian countries (such as Taiwan, Hong Kong, Thailand, South Korea, Singapore, and Indonesia), whereas chip and PIN cards are more common in most European countries (e.g.,

1044-576: A change to its checking account rewards program, a new industry-leading reward of 1% cash back on up to $ 3,000 in qualifying debit card purchases each month. Additionally DFS also introduced First Fee Forgiveness, a new program that automatically waives the first eligible fee each calendar year for certain Discover accounts. Eligible fees included in the program were inclusive of insufficient funds, stop payment, excessive withdrawal and Money Market minimum balance fees. For its U.S.-based employees, DFS launched

1160-424: A credit or debit card, used as a security feature for card-not-present (CNP) payment card transactions to reduce the incidence of fraud. The Card Security Code (CSC) is to be given to the merchant by the cardholder to complete a card-not-present transaction. The CSC is transmitted along with other transaction data and verified by the card issuer. The Payment Card Industry Data Security Standard (PCI DSS) prohibits

1276-416: A decision on whether to approve or decline a transaction (including transaction amount, but many other data objects too). The terminal sends this data and requests a cryptogram using the generate application cryptogram command. Depending on the terminal's decision (offline, online, decline), the terminal requests one of the following cryptograms from the card: This step gives the card the opportunity to accept

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1392-521: A global leader in electronic commerce and payment services, announced that First Data would offer Discover Network card services to small- and mid-sized merchants. On March 13, 2007, Discover Financial Services announced the Discover Motiva card, the credit card that gives cardmembers cash rewards for making six on-time monthly payments in a row. This card was the industry's first credit card to give cash rewards for good credit management. Later in

1508-490: A list of functions to perform in processing the transaction. The card also provides the application file locator (AFL), a list of files and records that the terminal needs to read from the card. Smart cards store data in files. The AFL contains the files that contain EMV data. These all must be read using the read record command. EMV does not specify which files data is stored in, so all the files must be read. Data in these files

1624-535: A notice stating unauthorized access to magnetic strips costing Target over 300 million dollars along with the increasing cost of online credit theft was enough for the United States to invest in the technology. The adaptation of EMV's increased significantly in 2015 when the liability shifts occurred in October by the credit card companies. Contactless smart cards do not require physical contact between

1740-532: A plastic card in the late 1960s. The idea of incorporating an integrated circuit chip onto a plastic card was first introduced by the German engineer Helmut Gröttrup . In February 1967, Gröttrup filed the patents DE1574074 and DE1574075 in West Germany for a tamper-proof identification switch based on a semiconductor device and described contactless communication via inductive coupling. Its primary use

1856-506: A platform called Credit Scorecard, which also included a summary of the data that helps determine an individual's FICO Credit Score. In 2017, Discover Financial Services launched a free service called Discover Identity Alerts to notify cardmembers if their social security numbers are found on risky websites and if any new accounts are opened on their Experian credit report. All of these services are offered at no cost and do not impact credit scores. In 2018, Discover Financial Services announced

1972-539: A proposed consumer class action lawsuit was filed in Virginia , claiming that the acquisition would be in violation of federal antitrust laws, and form the largest U.S. credit card issuer by balance and sixth-largest U.S. bank by assets. The Greenwood Trust Company was founded on August 30, 1911, and was based in Greenwood, Delaware . It was acquired in 1985 and renamed Discover Bank on August 1, 2000. Discover Bank

2088-576: A reader, as well as contactless cards that can be read over a short distance using near-field communication technology. Payment cards which comply with the EMV standard are often called chip and PIN or chip and signature cards, depending on the authentication methods employed by the card issuer, such as a personal identification number (PIN) or electronic signature . Standards exist, based on ISO/IEC 7816 , for contact cards, and based on ISO/IEC 14443 for contactless cards ( Mastercard Contactless , Visa PayWave , American Express ExpressPay ). Until

2204-644: A restaurant called Vincente's Restaurant in Wilmington, Delaware. In 1995, DiscoverCard.com was launched where consumers could apply for credit cards, pay bills, redeem rewards, receive email reminders, and earn extra rewards through online retail partners. On December 22, 1998, the company introduced Discover Platinum, a premium card featuring new ways to increase rewards, low balance transfer and annual percentage rates, no annual fee, and expanded credit lines. On December 21, 2001, fourth-quarter income at Discover grew 31% to $ 193 million, compared with $ 147 million

2320-425: A slender phone book, yet without any data aside from the list of invalid numbers. Checkout cashiers were expected to thumb through this booklet each and every time a credit card was presented for payment of any amount, prior to approving the transaction, which incurred a short delay. Later , terminal equipment at the merchant electronically contacted the card issuer, using information from the magnetic stripe to verify

2436-406: A static CSC. The first generation of Dynamic CSC cards, developed by NagraID Security required a battery, a quartz and Real Time Clock (RTC) embedded within the card to power the computation of a new Dynamic CSC, after expiration of the programmed period. The second generation of Dynamic CSC cards, developed by Ellipse World, Inc., does not require any battery, quartz, or RTC to compute and display

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2552-463: A terminal requiring a PIN. The introduction of chip and PIN coincided with wireless data transmission technology becoming inexpensive and widespread. In addition to mobile-phone-based magnetic readers, merchant personnel can now bring wireless PIN pads to the customer, so the card is never out of the cardholder's sight. Thus, both chip and PIN and wireless technologies can be used to reduce the risks of unauthorized swiping and card cloning. Chip and PIN

2668-522: A wide variety of components. The choice of components drives functionality, influences cost, power supply needs, and manufacturing complexity. Depending on Complex Card types, buttons have been added to allow an easy interaction between the user and the card. Typically, these buttons are used to: While separate keys have been used on prototypes in the early days, capacitive keyboards are the most popular solution now, thanks to technology developments by AudioSmartCard International SA. The interaction with

2784-590: Is FDIC insured. In 2005, Discover Financial Services acquired Pulse , an interbank electronic funds transfer payments network. This allowed Pulse and its more than 4,000 member banks, credit unions, and savings institutions to join with the Discover Network's four million merchant and cash access locations. Additionally DFS now had the ability to market and issue debit and ATM cards. On February 13, 2006, DFS announced that it would begin offering Discover debit cards to other financial institutions, becoming

2900-417: Is a cryptographic check to validate the card using public-key cryptography . There are three different processes that can be undertaken depending on the card: To verify the authenticity of payment cards, EMV certificates are used. The EMV Certificate Authority issues digital certificates to payment card issuers. When requested, the payment card chip provides the card issuer's public key certificate and SSAD to

3016-595: Is accepted in 200+ countries and territories. From 1998 to 2007, Discover Card owned a billboard at One Times Square , just above the flagpole where the Times Square Ball is placed, until Toshiba bought the space. As a result, its logo could be seen on national television during New Year's Eve , while the ball dropped. Discover also sponsored the ball drop itself. From its opening in 2001 to 2012, Sugarloaf Mills Mall in Lawrenceville, Georgia ,

3132-401: Is also a type of smart card. As of 2015 , 10.5   billion smart card IC chips are manufactured annually, including 5.44   billion SIM card IC chips. The basis for the smart card is the silicon integrated circuit (IC) chip. It was invented by Robert Noyce at Fairchild Semiconductor in 1959. The invention of the silicon integrated circuit led to the idea of incorporating it onto

3248-444: Is also possible to have a 1 in an online counter, and a check against a hot card list (which is only necessary for off-line transactions). If the result of any of these tests is positive, the terminal sets the appropriate bit in the terminal verification results (TVR). The results of previous processing steps are used to determine whether a transaction should be approved offline, sent online for authorization, or declined offline. This

3364-466: Is done using a combination of data objects known as terminal action codes (TACs) held in the terminal and issuer action codes (IACs) read from the card. The TAC is logically OR'd with the IAC, to give the transaction acquirer a level of control over the transaction outcome. Both types of action code take the values Denial, Online, and Default. Each action code contains a series of bits which correspond to

3480-603: Is issued by EMVCo following submission of results of testing performed by an accredited testing house. EMV Compliance testing has two levels: EMV Level 1, which covers physical, electrical and transport level interfaces, and EMV Level 2, which covers payment application selection and credit financial transaction processing. After passing common EMVCo tests, the software must be certified by payment brands to comply with proprietary EMV implementations such as Visa VSDC, American Express AEIPS, Mastercard MChip, JCB JSmart, or EMV-compliant implementations of non-EMVCo members such as LINK in

3596-574: Is issued by the ISO/IEC 7816-5 registration authority. This is followed by a proprietary application identifier extension (PIX), which enables the application provider to differentiate among the different applications offered. The AID is printed on all EMV cardholder receipts. Card issuers can alter the application name from the name of the card network. List of applications: (Eight West African countries: Benin, Burkina Faso, Côte d'Ivoire, Guinea Bissau, Mali, Niger, Senegal, Togo) The terminal sends

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3712-527: Is less harmful to the environment than traditional PVC cards. Smart cards are also being introduced for identification and entitlement by regional, national, and international organizations. These uses include citizen cards, drivers’ licenses, and patient cards. In Malaysia , the compulsory national ID MyKad enables eight applications and has 18 million users. Contactless smart cards are part of ICAO biometric passports to enhance security for international travel. Complex Cards are smart cards that conform to

3828-475: Is mainly an online financial institution that offers many financial services such as checking accounts, savings accounts, and money market accounts. However the first and original location of the Greenwood Trust Company on 502 East Market Street is still operating and is the only physical banking location of Discover Bank. Discover Bank operates as a subsidiary of Discover Financial Services and

3944-402: Is not possible for the merchant to present a keypad to the customer in these cases, so alternatives have been devised, including As for which is faster, The New York Times explained that it's a matter of perception: While the chip method requires that the chip stay in the machine until the transaction and the authorization process is completed, the phone swipe method does the authorization in

4060-435: Is one of the two verification methods that EMV enabled cards can employ. Rather than physically signing a receipt for identification purposes, the user enters a personal identification number (PIN), typically of four to six digits in length. This number must correspond to the information stored on the chip or PIN at Host. Chip and PIN technology makes it much harder for fraudsters to use a found card, inasmuch as if someone steals

4176-425: Is prescribed in EMV is a frequent source of interoperability problems between cards and terminals. Book 1 of the EMV standard devotes 15 pages to describing the application selection process. An application identifier (AID) is used to address an application in the card or Host Card Emulation (HCE) if delivered without a card. An AID consists of a registered application provider identifier (RID) of five bytes, which

4292-488: Is stored in BER TLV format. EMV defines tag values for all data used in card processing. The purpose of the processing restrictions is to see if the card should be used. Three data elements read in the previous step are checked: Application version number, Application usage control (this shows whether the card is only for domestic use, etc.), Application effective/expiration dates checking. If any of these checks fails,

4408-559: Is that new information is transmitted with the payment transactions, thus making it useless for a potential fraudster to memorize or store it. A transaction with a Dynamic Card Security Code is carried out exactly the same way, with the same processes and use of parameters as a transaction with a static code in a card-not-present transaction. Upgrading to a DCSC allows cardholders and merchants to continue their payment habits and processes undisturbed. Complex Cards can be equipped with biometric sensors allowing for stronger user authentication. In

4524-559: The Dean Witter Reynolds brokerage firm organization and Coldwell, Banker & Company (real estate franchise) as an attempt to add financial services to its portfolio of customer services. In 1985, Sears also acquired the Greenwood Trust Company. Altogether, these companies operated as a Sears subsidiary called Dean Witter Financial Services Group, Inc. The plan to create a one-stop financial-services center in Sears stores

4640-567: The Discover Card . In 1997, this company merged with investment banking house Morgan Stanley to become Morgan Stanley Dean Witter, Discover & Co. On February 1, 1999, the company rebranded itself as Discover Financial Services, Inc. The NOVUS logo was retired, replaced by the Discover Network logo. In April 2005, Morgan Stanley announced that it would divest Discover Financial Services as an independent company within six months. By June, industry sources reported that Morgan Stanley

4756-474: The ISO/IEC 14443 standard, and magstripe. Developers of Complex Cards target several needs when developing them: A Complex Card can be used to compute a cryptographic value, such as a One-time password . The One-Time Password is generated by a cryptoprocessor encapsulated in the card. To implement this function, the crypto processor must be initialized with a seed value, which enables the identification of

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4872-459: The ISO/IEC 7810 standard and include components in addition to those found in traditional single chip smart cards. Complex Cards were invented by Cyril Lalo and Philippe Guillaud in 1999 when they designed a chip smart card with additional components, building upon the initial concept consisting of using audio frequencies to transmit data patented by Alain Bernard. The first Complex Card prototype

4988-412: The get processing options command to the card. When issuing this command, the terminal supplies the card with any data elements requested by the card in the processing options data objects list (PDOL). The PDOL (a list of tags and lengths of data elements) is optionally provided by the card to the terminal during application selection . The card responds with the application interchange profile (AIP),

5104-644: The Arimura Technology Institute in Japan developed a similar idea of incorporating an integrated circuit onto a plastic card, and filed a smart card patent in March 1970. The following year, Paul Castrucci of IBM filed an American patent titled "Information Card" in May 1971. In 1974 Roland Moreno patented a secured memory card later dubbed the "smart card". In 1976, Jürgen Dethloff introduced

5220-663: The Diners Club network, which is a major network outside the United States, will be merged with the Discover Network, a major network in the United States. The creation of an international network for Discover and Diners Club cardholders allowed customers to expand their global reach. Diners Club cards will continue to be issued by Diners Club International licensees. At this time, Discover Bank has no plans on issuing Diners Club branded cards itself. On September 17, 2010, Discover Financial Services announced it would acquire Citigroup-owned Student Loan Corporation for $ 30/share. The deal

5336-1019: The Discover College Commitment, which offers employees a full ride bachelor's degree program covering tuition, required fees, books, and supplies to select online degrees. On September 12, DFS launched the Discover it Business credit card, offering unlimited 1.5% cash back on all purchases, as well as free business and security features. In 2019, Discover Financial Services' subsidiary Discover Bank eliminated most fees on all of its deposit products. Additionally, Discover Home Equity Loans surpassed $ 1 billion in funded loans, helping over 20,000 homeowners with their financial goals. DFS also launched contactless cards this year. In 2021, Discover Bank originated 14,148 mortgages worth $ 1.3 billion. Discover Financial Services has 3 payment systems that make up its Discover Global Network: Discover Network , Diners Club International , and Pulse . Since 2005, to increase acceptance of its payment cards around

5452-681: The Discover Network. Sam's Club exclusively accepted Discover for many years; since November 2006, it has also accepted MasterCard for purchases. In April 2014, Walmart announced that they were ending their relationship with Discover and would begin converting all Discover-branded cards to Mastercard beginning in June 2014. HSBC has issued Discover-branded credit cards processed through the Discover Network since its acquisition of card issuer Metris in late 2005. Metris had originally signed an agreement with Discover in September 2005, three months prior to

5568-477: The Discover® Card for cash advances at its approximately 450 Financial Centers and more than 2,000 ATM locations nationwide. In 2003, Discover introduced gas and miles rewards cards. The Gasoline Card (renamed Open Road in 2007) awarded 5% Cashback Bonus on gas purchases. The Miles Card by Discover card allowed redemption with as little as 2,500 miles for non-flight reward options. Discover also introduced

5684-433: The EMV specifications. Terminal risk management is only performed in devices where there is a decision to be made whether a transaction should be authorised on-line or offline. If transactions are always carried out on-line (e.g., ATMs) or always off-line, this step can be skipped. Terminal risk management checks the transaction amount against an offline ceiling limit (above which transactions should be processed on-line). It

5800-440: The EMV system was released in 1994. In 1998 the specifications became stable. EMVCo maintains these specifications. EMVco's purpose is to assure the various financial institutions and retailers that the specifications retain backward compatibility with the 1998 version. EMVco upgraded the specifications in 2000 and 2004. EMV compliant cards were first accepted into Malaysia in 2005 and later into United States in 2014. MasterCard

5916-507: The EMV technology in 2014, with the deployment still in progress in 2019. Typically, a country's national payment association, in coordination with MasterCard International, Visa International, American Express and Japan Credit Bureau (JCB), jointly plan and implement EMV systems. Historically, in 1993 several international payment companies agreed to develop smart-card specifications for debit and credit cards. The original brands were MasterCard, Visa, and Europay . The first version of

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6032-476: The FAFSA. The tool provides individualized tips and guidance based on personal situations. On June 6, 2012, Tree.com, Inc. completed the sale of substantially all of the operating assets of its Home Loan Center, Inc. business to a wholly owned subsidiary of Discover Financial. In exchange for the assets sold, Discover paid an aggregate of $ 45.9 million including payments made prior to the closing which were applied to

6148-638: The HSBC acquisition. In 2006, Discover Network united with Visa, MasterCard, American Express, and JCB to form the Payment Card Industry (PCI) Security Standards Council, which helps to manage the ongoing payment account security throughout the transaction process. In this same year, DFS also launched the Discover Business Card, offering a single payment solution for small business owners. On July 14, 2006, DFS and First Data Corp.,

6264-567: The Marines corps (USMC) at Parris Island allowing small amount payments at the cafeteria. Since the 1990s, smart cards have been the subscriber identity modules (SIMs) used in GSM mobile-phone equipment. Mobile phones are widely used across the world, so smart cards have become very common. Europay MasterCard Visa (EMV)-compliant cards and equipment are widespread with the deployment led by European countries. The United States started later deploying

6380-623: The OTPs respective of each card. The hash of seed value has to be stored securely within the card to prevent unauthorized prediction of the generated OTPs. One-Time Passwords generation is based either on incremental values (event based) or on a real time clock (time based). Using clock-based One-Time Password generation requires the Complex Card to be equipped with a Real-time clock . Complex Cards used to generate One Time Password have been developed for: A Complex Card with buttons can display

6496-487: The Télécarte, microchips were integrated into all French Carte Bleue debit cards in 1992. Customers inserted the card into the merchant's point-of-sale (POS) terminal, then typed the personal identification number (PIN), before the transaction was accepted. Only very limited transactions (such as paying small highway tolls ) are processed without a PIN. Smart-card-based " electronic purse " systems store funds on

6612-681: The UK, Ireland, France, Portugal, Finland and the Netherlands) as well as in Pakistan, Iran, Brazil, Colombia, Venezuela, India, Sri Lanka, Canada, Australia and New Zealand. While EMV technology has helped reduce crime at the point of sale, fraudulent transactions have shifted to more vulnerable telephone , Internet , and mail order transactions—known in the industry as card-not-present or CNP transactions. CNP transactions made up at least 50% of all credit card fraud. Because of physical distance, it

6728-994: The UK, or Interac in Canada. Smart card A smart card ( SC ), chip card , or integrated circuit card ( ICC or IC card ), is a card used to control access to a resource. It is typically a plastic credit card-sized card with an embedded integrated circuit (IC) chip. Many smart cards include a pattern of metal contacts to electrically connect to the internal chip. Others are contactless , and some are both. Smart cards can provide personal identification, authentication, data storage, and application processing. Applications include identification, financial, public transit, computer security, schools, and healthcare. Smart cards may provide strong security authentication for single sign-on (SSO) within organizations. Numerous nations have deployed smart cards throughout their populations. The universal integrated circuit card (UICC) for mobile phones, installed as pluggable SIM card or embedded eSIM ,

6844-460: The US and Europe. Use of "Contactless" smart cards in transport has also grown through the use of low cost chips NXP Mifare Ultralight and paper/card/PET rather than PVC. This has reduced media cost so it can be used for low cost tickets and short term transport passes (up to 1 year typically). The cost is typically 10% that of a PVC smart card with larger memory. They are distributed through vending machines, ticket offices and agents. Use of paper/PET

6960-723: The appropriate bit in the Denial IAC. Other issuers may want the transaction to proceed on-line so that they can in some cases allow these transactions to be carried out. When an online-only device performs IAC-Online and TAC-Online processing the only relevant TVR bit is "Transaction value exceeds the floor limit". Because the floor limit is set to zero, the transaction should always go online and all other values in TAC-Online or IAC-Online are irrelevant. Online-only devices do not need to perform IAC-default processing. An online-only device such as an ATM always attempts to go on-line with

7076-472: The authorization request, unless declined off-line due to IAC-Denial settings. During IAC-Denial and TAC-Denial processing, for an online only device, the only relevant Terminal verification results bit is "Service not allowed". One of the data objects read from the card in the Read application data stage is CDOL1 (Card Data object List). This object is a list of tags that the card wants to be sent to it to make

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7192-534: The background; a receipt starts coming out right away. ISO/IEC 7816 -3 defines the transmission protocol between chip cards and readers. Using this protocol, data is exchanged in application protocol data units (APDUs). This comprises sending a command to a card, the card processing it, and sending a response. EMV uses the following commands: Commands followed by "7816-4" are defined in ISO/IEC 7816-4 and are interindustry commands used for many chip card applications such as GSM SIM cards. An EMV transaction has

7308-404: The balance of one or multiple account(s) linked to the card. Typically, either one button is used to display the balance in the case of a single account card or, in the case of a card linked to multiple accounts, a combination of buttons is used to select a specific account's balance. For additional security, features such as requiring the user to enter an identification or a security value such as

7424-550: The bits in the Terminal verification results (TVR), and are used in the terminal's decision whether to accept, decline or go on-line for a payment transaction. The TAC is set by the card acquirer; in practice card schemes advise the TAC settings that should be used for a particular terminal type depending on its capabilities. The IAC is set by the card issuer; some card issuers may decide that expired cards should be rejected, by setting

7540-438: The card and authorize the transaction. This was much faster, but required the transaction to occur in a fixed location. Consequently, if the transaction did not take place near a terminal (in a restaurant, for example) the clerk or waiter had to take the card away from the customer and to the card machine. It was easily possible for a dishonest employee to swipe the card surreptitiously through a cheap machine that instantly recorded

7656-439: The card is not necessarily declined. The terminal sets the appropriate bit in the terminal verification results (TVR), the components of which form the basis of an accept/decline decision later in the transaction flow. This feature lets, for example, card issuers permit cardholders to keep using expired cards after their expiry date, but for all transactions with an expired card to be performed on-line. Offline data authentication

7772-504: The card is the legitimate cardholder. There are many cardholder verification methods (CVMs) supported in EMV. They are The terminal uses a CVM list read from the card to determine the type of verification to perform. The CVM list establishes a priority of CVMs to use relative to the capabilities of the terminal. Different terminals support different CVMs. ATMs generally support online PIN. POS terminals vary in their CVM support depending on type and country. For offline enciphered PIN methods,

7888-400: The card issuer, and the card never left the customer's sight. The merchant had to verify transactions over a certain currency limit by telephoning the card issuer. During the 1970s in the United States, many merchants subscribed to a regularly-updated list of stolen or otherwise invalid credit card numbers. This list was commonly printed in booklet form on newsprint, in numerical order, much like

8004-494: The card). ARPC processing is not performed in contact transactions processed with Visa Quick Chip for EMV and Mastercard M/Chip Fast, and in contactless transactions across schemes because the card is removed from the reader after the ARQC has been generated. CDOL2 (Card data object list) contains a list of tags that the card wanted to be sent after online transaction authorisation (response code, ARPC, etc.). Even if for any reason

8120-671: The card, so that readers do not need network connectivity. They entered European service in the mid-1990s. They have been common in Germany ( Geldkarte ), Austria ( Quick Wertkarte ), Belgium ( Proton ), France ( Moneo ), the Netherlands ( Chipknip Chipper (decommissioned in 2015)), Switzerland ("Cash"), Norway (" Mondex "), Spain ("Monedero 4B"), Sweden ("Cash", decommissioned in 2004), Finland ("Avant"), UK ("Mondex"), Denmark ("Danmønt") and Portugal ("Porta-moedas Multibanco"). Private electronic purse systems have also been deployed such as

8236-413: The card. In the former case, the system verifies account details and prints a slip for the customer to sign. In the case of a mechanical imprint, the transaction details are filled in, a list of stolen numbers is consulted, and the customer signs the imprinted slip. In both cases the cashier must verify that the customer's signature matches that on the back of the card to authenticate the transaction. Using

8352-432: The closing price. On June 12, 2012, Discover began originating mortgages with its launch of Discover Home Loans, offering prime variable- and fixed-rate conventional and FHA home mortgage loans. In 2013, Discover's Home Loans business started offering home equity loans. As of 2023, the only home loans Discover originates are home equity loans and mortgage refinances. In 1989, Discover Network signs its 1 millionth merchant,

8468-457: The contents of the ARQC. The ARQC created by the card application is a digital signature of the transaction details, which the card issuer can check in real time. This provides a strong cryptographic check that the card is genuine. The issuer responds to an authorization request with a response code (accepting or declining the transaction), an authorisation response cryptogram (ARPC) and optionally an issuer script (a string of commands to be sent to

8584-578: The first credit card services company to compete directly with MasterCard and Visa in the rapidly growing signature debit market. In April 2008, Discover Financial and Citigroup announced that Discover was purchasing the Diners Club International network from Citigroup for $ 165 million. In May 2008, the Federal Trade Commission approved the transaction and it was finalized on July 1, 2008. Discover stated that

8700-424: The following steps: ISO/IEC 7816 defines a process for application selection. The intent of application selection was to let cards contain completely different applications—for example GSM and EMV. However, EMV developers implemented application selection as a way of identifying the type of product, so that all product issuers (Visa, Mastercard, etc.) must have their own application. The way application selection

8816-530: The funds. In 2009, Discover Financial Services introduced the Spend Analyzer tool, an innovative easy-to-use online tool that provides cardmembers with a visual representation of their Discover card purchases for the past 24 months. In 2010, Discover Financial Services and Softcard announced a strategic partnership to build a mobile payment network that utilizes mobile phones to make point-of-sale purchases. In September 2012, Discover Financial Services

8932-440: The holder's signature and visual inspection of the card to check for features such as hologram . The use of a PIN and cryptographic algorithms such as Triple DES , RSA and SHA provide authentication of the card to the processing terminal and the card issuer's host system. The processing time is comparable to online transactions, in which communications delay accounts for the majority of the time, while cryptographic operations at

9048-502: The idea of incorporating it onto a plastic smart card in the late 1960s by two German engineers, Helmut Gröttrup and Jürgen Dethloff . The earliest smart cards were introduced as calling cards in the 1970s, before later being adapted for use as payment cards . Smart cards have since used MOS integrated circuit chips, along with MOS memory technologies such as flash memory and EEPROM (electrically erasable programmable read-only memory ). The first standard for smart payment cards

9164-464: The identity of the cardholder by requiring the entry of a personal identification number (PIN) rather than signing a paper receipt. Whether or not PIN authentication takes place depends upon the capabilities of the terminal and programming of the card. When credit cards were first introduced, merchants used mechanical rather than magnetic portable card imprinters that required carbon paper to make an imprint. They did not communicate electronically with

9280-429: The information on the card and stripe; in fact, even at the terminal, a thief could bend down in front of the customer and swipe the card on a hidden reader. This made illegal cloning of cards relatively easy and a more common occurrence than before. Since the introduction of payment card chip and PIN, cloning of the chip is not feasible; only the magnetic stripe can be copied, and a copied card cannot be used by itself on

9396-401: The introduction of chip & PIN, all face-to-face credit or debit card transactions involved the use of a magnetic stripe or mechanical imprint to read and record account data, and a signature for purposes of identity verification. The customer hands their card to the cashier at the point of sale who then passes the card through a magnetic reader or makes an imprint from the raised text of

9512-694: The known element (called "the secret") to identify gate user as of USP 4105156. In 1977, Michel Ugon from Honeywell Bull invented the first microprocessor smart card with two chips : one microprocessor and one memory , and in 1978, he patented the self-programmable one-chip microcomputer (SPOM) that defines the necessary architecture to program the chip. Three years later, Motorola used this patent in its "CP8". At that time, Bull had 1,200 patents related to smart cards. In 2001, Bull sold its CP8 division together with its patents to Schlumberger , who subsequently combined its own internal smart card department and CP8 to create Axalto . In 2006, Axalto and Gemplus, at

9628-495: The merger of Oberthur Technologies and Safran Identity & Security (Morpho) in 2017), Gemalto (acquired by the Thales Group in 2019) Giesecke & Devrient and Versatile Card Technology. There are two major benefits to moving to smart-card-based credit card payment systems: improved security (with associated fraud reduction), and the possibility for finer control of "offline" credit-card transaction approvals. One of

9744-542: The new dynamic code. Instead, the card obtains its power either through the usual card connector or by induction during every EMV transaction from the Point of Sales (POS) terminal or Automated Teller Machine (ATM) to compute a new DCSC. The Dynamic CSC, also called dynamic cryptogram, is marketed by several companies, under different brand names: The advantage of the Dynamic Card Security Code (DCSC)

9860-500: The number of remaining trips or the expiry date of a transit pass can be displayed. A Complex Card being deployed as a payment card can be equipped with capability to provide transaction security. Typically, online payments are made secure thanks to the Card Security Code (CSC) , also known as card verification code (CVC2), or card verification value (CVV2). The card security code (CSC) is a 3 or 4 digits number printed on

9976-982: The opportunity to simplify their finances inclusive of supporting home improvement projects, paying for major expenses, or consolidating debt into a single, fixed monthly payment. Discover also became the first major credit card issuer to provide free access to FICO Credit Scores based on TransUnion data directly to its cardmembers on their monthly statements. Additional information provided with their FICO Credit Scores were educational content to help them better understand their scores. In 2014, Discover Financial Services launched Discover it Chrome for Students, allowing students to establish credit while earning 2% at gas stations and restaurants. In 2015, Discover Financial Services launched Discover it Miles, which rewards 1.5 miles per dollar spent. In 2016, Discover Financial Services launched Discover it Secured for consumers looking to build their credit. Additionally, DFS expanded FICO Credit Scores based on TransUnion data for free to everyone via

10092-421: The option for paperless statements to minimize the impact on the environment and reduce clutter for customers. In October 2004, the Supreme Court upheld a ruling in Discover's favor that challenged exclusionary policies of Visa and MasterCard, stating that Mastercard and Visa were violating antitrust regulations with anticompetitive practices. Before this ruling, Visa and MasterCard would not allow banks to issue

10208-424: The original goals of EMV was to provide for multiple applications on a card: for a credit and debit card application or an e-purse. Beginning in 2013, new-issue debit cards in the US contain two applications — a card association (Visa, Mastercard etc.) application, and a common debit application. EMV chip card transactions improve security against fraud compared to magnetic stripe card transactions that rely on

10324-432: The same year, Discover Cashback Checking was introduced. This checking account product paid customers 10 cents for every debit card purchase, online bill payment, and check written. Additionally in this same year, the Discover it card was announced. The card rewards cardmembers with 5% cash back in rotating categories each quarter like gas and restaurants. Discover also introduced Discover Home Equity Loans, offering homeowners

10440-410: The signature on the card as a verification method has a number of security flaws, the most obvious being the relative ease with which cards may go missing before their legitimate owners can sign them. Another involves the erasure and replacement of legitimate signature, and yet another involves the forgery of the correct signature. The invention of the silicon integrated circuit chip in 1959 led to

10556-482: The smart chip technology to protect itself from future credit card identity theft. Before 2014, the consensus in America was that there were enough security measures to avoid credit card theft and that the smart chip was not necessary. The cost of the smart chip technology was significant, which was why most of the corporations did not want to pay for it in the United States. The debate finally ended when Target sent out

10672-489: The standard is defined and managed by the privately owned corporation EMVCo LLC. The current members of EMVCo are American Express , Discover Financial , JCB International , Mastercard , China UnionPay , and Visa Inc. Each of these organizations owns an equal share of EMVCo and has representatives in the EMVCo organization and EMVCo working groups. Recognition of compliance with the EMV standard (i.e., device certification)

10788-617: The standard. The standard is now managed by EMVCo , a consortium with control split equally among Visa, Mastercard, JCB , American Express , China UnionPay , and Discover. EMVCo accepts public comment on its draft standards and processes, but also allows other organizations to become "Associates" and "Subscribers" for deeper collaboration. JCB joined the consortium in February 2009, China UnionPay in May 2013, and Discover in September 2013. The top vendors of EMV cards and chips are: ABnote (American Bank Corp), CPI Card Group, IDEMIA (from

10904-594: The storage of the CSC by the merchant or any stakeholder in the payment chain. Although designed to be a security feature, the static CSC is susceptible to fraud as it can easily be memorized by a shop attendant, who could then use it for fraudulent online transactions or sale on the dark web. This vulnerability has led the industry to develop a Dynamic Card Security Code (DCSC) that can be changed at certain time intervals, or after each contact or contactless EMV transaction. This Dynamic CSC brings significantly better security than

11020-415: The terminal and can be encrypted between the card and the issuer to provide additional security. Issuer script can be used to block cards, or change card parameters. Issuer script processing is not available in contact transactions processed with Visa Quick Chip for EMV and Mastercard M/Chip Fast, and for contactless transactions across schemes. The first version of EMV standard was published in 1995. Now

11136-429: The terminal could not go online (e.g., communication failure), the terminal should send this data to the card again using the generate authorisation cryptogram command. This lets the card know the issuer's response. The card application may then reset offline usage limits. If a card issuer wants to update a card post issuance it can send commands to the card using issuer script processing. Issuer scripts are meaningless to

11252-534: The terminal encrypts the cleartext PIN block with the card's public key before sending it to the card with the Verify command. For the online PIN method, the cleartext PIN block is encrypted by the terminal using its point-to-point encryption key before sending it to the acquirer processor in the authorization request message. All offline methods are vulnerable to man-in-the-middle attacks . In 2017, EMVCo added support for biometric verification methods in version 4.3 of

11368-510: The terminal take comparatively little time. The supposed increased protection from fraud has allowed banks and credit card issuers to establish a "liability shift", such that merchants are liable (as of 1 January 2005 in the EU region and 1 October 2015 in the US) for any fraud that results from transactions on systems that are not EMV-capable. The majority of implementations of EMV cards and terminals confirm

11484-403: The terminal's action analysis or to decline a transaction or force a transaction on-line. The card cannot return a TC when an ARQC has been asked for, but can return an ARQC when a TC has been asked for. Transactions go online when an ARQC has been requested. The ARQC is sent in the authorisation message. The card generates the ARQC. Its format depends on the card application. EMV does not specify

11600-464: The terminal. The terminal retrieves the CA's public key from local storage and uses it to confirm trust for the CA and, if trusted, to verify the card issuer's public key was signed by the CA. If the card issuer's public key is valid, the terminal uses the card issuer's public key to verify the card's SSAD was signed by the card issuer. Cardholder verification is used to evaluate whether the person presenting

11716-530: The time the world's top two smart-card manufacturers, merged and became Gemalto . In 2008, Dexa Systems spun off from Schlumberger and acquired Enterprise Security Services business, which included the smart-card solutions division responsible for deploying the first large-scale smart-card management systems based on public key infrastructure (PKI). The first mass use of the cards was as a telephone card for payment in French payphones , starting in 1983. After

11832-437: The typical use case, fingerprint sensors are integrated into a payment card to bring a higher level of user authentication than a PIN. To implement user authentication using a fingerprint enabled smart card, the user has to authenticate himself/herself to the card by means of the fingerprint before starting a payment transaction. Several companies offer cards with fingerprint sensors, including: Complex Cards can incorporate

11948-442: The usual card connector and/or induction . Sound, generated by a buzzer, was the preferred means of communication for the first projects involving Complex Cards. Later, with the progress of displays, visual communication is now present in almost all Complex Cards. Complex Cards support all communication protocols present on regular smart cards: contact, thanks to a contact pad as defined ISO/IEC 7816 standard, contactless following

12064-455: The world, Discover has formed several agreements with other payment networks internationally. This allows Discover cardholders to perform transactions while traveling abroad. Vice versa, cardholders of other countries may utilize their cards at U.S. merchants and financial institutions that accept Discover. Some major credit and debit partners include: Some major debit partners include: With these and many other global partnerships, Discover

12180-548: The year before. In 2002, Discover launched the industry's first keychain credit card. It was named the Discover 2GO Card and was recognized as one of the "Best Products of 2002" by editors and reporters from Business Week and USA Today. On March 5, 2002, the company announced that the Account Center at Discovercard.com had registered over eight million card members, an increase of 61% since January 2001. On September 1, 2002, Discover announced that Citibank would accept

12296-686: The year, DFS announced the Discover More card to replace the Discover Platinum card. The Discover More card was designed for consumers who use credit in many different categories and provided them with more ways to earn cash back on their purchases. Following the 2007–2008 financial crisis , Discover received about $ 1.2 billion in bailout funds under the Troubled Asset Relief Program (TARP). The company announced in 2010 that it had received approval to pay back

12412-434: Was developed collaboratively by Cyril Lalo and Philippe Guillaud, who were working at AudioSmartCard at the time, and Henri Boccia and Philippe Patrice, who were working at Gemplus . It was ISO 7810-compliant and included a battery, a piezoelectric buzzer, a button, and delivered audio functions, all within a 0.84mm thickness card. The Complex Card pilot, developed by AudioSmartCard, was launched in 2002 by Crédit Lyonnais ,

12528-496: Was finalized on December 31, renamed Discover Student Loans, and expanded DFS's market presence and origination capabilities in private student loans. In 2014, DFS launched Rewards for Good Grades, rewarding college and graduate students who get at least a 3.0 GPA (or equivalent) a one-time cash reward equal to 1% of the loan amount on each new Discover student loan. In 2015, DFS introduced an interactive tool called FAFSA Assistant to help students and their families get ready to complete

12644-469: Was intended to provide individual copy-protected keys for releasing the tapping process at unmanned gas stations. In September 1968, Gröttrup, together with Jürgen Dethloff as an investor, filed further patents for this identification switch, first in Austria and in 1969 as subsequent applications in the United States, Great Britain, West Germany and other countries. Independently, Kunitaka Arimura of

12760-558: Was named Discover Mills in a naming rights partnership with Discover Card. The slogan for the mall was "Where Discover Card is the Smart Choice." It was the first shopping mall to have granted naming rights to interested companies. Since 2008, Discover has been the official credit-card partner of the National Hockey League . As part of this deal, Discover offers team- and league-branded credit cards as well as

12876-548: Was not as successful as Sears had hoped. Its credit card operations accounted for a loss of $ 22 million in the fourth quarter of 1986, and a loss of $ 25.8 million in the first quarter of 1987. In March 1993, Sears sold off its financial services branch as a new independent publicly traded company called Dean Witter, Discover & Co. with Dean Witter Reynolds in charge. This company had a stock ticker symbol of DWD. In 1995, Discover Card Services, Inc. changed its name to NOVUS Services, Inc. to distinguish its network functions from

12992-568: Was ordered to pay over $ 200 million in fines and customer reimbursements to settle accusations by U.S. federal regulators that it had engaged in deceptive telemarketing tactics. In 2012, Discover Financial Services announced a five year, $ 10 million commitment called Pathway to Financial Success to help bring financial education curriculum to public high schools across the U.S. In 2013, Discover Financial Services and PayPal partnered to enable millions of participating merchants to accept PayPal easily through their existing relationship with Discover. In

13108-464: Was reassessing its plan to spin off Discover. In August, the company confirmed it would not sell Discover. However, on December 19, 2006, during a fourth quarter earnings report, Morgan Stanley CEO John J. Mack announced Discover would be spun off as a standalone publicly traded company by the end of August 2007, stating that both companies will be better positioned for growth and success as separate entities. Ahead of schedule on June 30, 2007, Discover

13224-545: Was spun off as an independent, publicly traded company. It began trading on the NYSE for the first time on July 2 as DFS. On February 20, 2024, Capital One announced its intention to acquire Discover in an all-stock deal worth $ 35.3 billion. That Spring, the Attorney General of New York launched an investigation into whether the proposed takeover of Discover would violate state anti-trust laws. In July 2024,

13340-652: Was the Carte Bancaire B0M4 from Bull-CP8 deployed in France in 1986, followed by the B4B0' (compatible with the M4) deployed in 1989. Geldkarte in Germany also predates EMV. EMV was designed to allow cards and terminals to be backwardly compatible with these standards. France has since migrated all its card and terminal infrastructure to EMV. EMV stands for Europay, Mastercard, and Visa, the three companies that created

13456-401: Was the first company that was allowed to use the technology in the United States. The United States has felt pushed to use the technology because of the increase in identity theft . The credit card information stolen from Target in late 2013 was one of the largest indicators that American credit card information is not safe. Target made the decision on 30 April 2014 that it would try to implement

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