| Euronet monitors industry trends, mandates and compliance requirements facing financial institutions. Organizations have complex systems that need the proper preparation and planning to address these issues. The following is helpful information to prepare financial institutions for the coming year.
Required MasterCard Mandates
MasterCard International has set an implementation deadline for 3DES and charges will occur if members do not comply.
Triple DES (3DES) is a cryptographic algorithm known as the Data Encryption Standard (DES). Triple DES is 2 to the 56th power times as strong as the existing DES. For example, today you can exhaustively test all of the keys of single length DES in 22 hours, whereas it would take 1.8 trillion centuries to test all of the possible double length keys in the 3DES model, given today's technology. The use of 3DES is a stepping-stone solution for newer encryption technologies such as the Advanced Encryption Standard (AES).
All the components of the transaction processing system must be inventoried to determine its impact by 3DES, including cryptographic devices, transaction endpoints (ATM, POS, PIN pads), transaction processing software, key management policies and procedures. Once the components are identified, each must be evaluated to determine its 3DES capability and readiness. And all non-3DES capable components need to be upgraded or replaced.
| Nov. 30, 2002 |
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Must commit to 3DES conversion date or be fined USD 10,000 (fee to be assessed Dec. 1, 2002) |
| Dec. 1, 2002 |
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If members fail to adhere to committed conversion date, will be charged USD 10,000 per month until corrected |
| April 1, 2003 |
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Any new or relocated ATMs and POS must be 3DES compliant; if not, a rescheduled implementation with conversion after date will be charged USD 25,000 |
| April 2005 |
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Full 3DES implementation required |
GCMS IPM
MasterCard’s Global Clearing Management System (GCMS) replaces the current INET message format with the more feature-rich IPM (Integrated Product Messages) format. IPM is a more flexible, variable-length format that supports new technologies such as chip cards, e-commerce and member-to-member proprietary data—all of which are not available in the current INET format.
Euronet provides IPM Clearing System software that processes incoming and outgoing batch file transactions from MasterCard as well as a Windows-browser based user interface for exception processing. The system is available in 1.5 and 2.2 releases or above.
For all MasterCard credit and debit card products, the IPM will become the standard format for both authorization and clearing processes. However, during the transition, MasterCard will process both INET and IPM formats until 2003.
| April 2003 |
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Release 3.1 Elimination of INET format |
| October 2003 |
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Final implementation of GCMS for completion of exception item processing |
VSDC
Euronet’s partnership with the Visa Smart Partner program has enabled Euronet to offer the Euronet Chip Card issuing and acquiring software products and consulting services to meet current and future industry and Visa scheme-specific requirements as well as best practices. The Visa Smart Debit Card (VSDC) program is set up to enable existing and future Euronet clients to move from restricted systems to VSDC-compliant software, bringing feature-rich, secure, card-based transactions.
This program is important for VSDC upgrades and other chip programs because the architecture needs to be sophisticated and flexible enough that modifications can be made without requiring large device infrastructure changes. The more flexible the system, the easier it is to respond to future market needs and new requirements.
As part of the Visa Smart Program, Euronet offers discounts for Euronet VSDC issuing and acquiring software to clients through May 2003.
IBM iSeries
IBM has evolved the AS/400 system to the next generation; the eServer iSeries. The platform is now fully equipped for e-business, relying less on its characteristics as a batch-based transaction server. It has the ability to run Windows NT, Unix, Lotus Domino, and now Linux applications on the same system with OS/400 applications. According to the Gartner Group, both the operating system and iSeries processors share some of IBM's most advanced technologies -- offering unrivaled midrange reliability, manageability and ease of use.
With the introduction of Operation Greenstreak, IBM has cut iSeries system prices, in some cases, to almost half off for specific models, making a great incentive to purchase up-to-date new releases. Euronet has been the pioneer in the EFT market for IBM midrange systems and maintains a close business partner relationship with IBM. Euronet encourages customers to stay current with new releases, preferably within two releases of OS/400 5.2. |
