December 15, 2014

  • Visa Worldwide (Japan) Co., Ltd.
  • Rakuten, Inc.

Tokyo, December 15, 2014 - Rakuten, Inc. today announced that it will start the sale and distribution of the Rakuten Smart Pay IC/Magnetic Card Reader ("IC/Magnetic Card Reader") in Rakuten Smart Pay*1, a smartphone payment service operated by Rakuten, on December 15, 2014.

Rakuten and Visa Worldwide (Japan) Co., Ltd. (Visa) have collaborated together on solutions utilizing smartphones as card payment terminals and smartphone payment services, with the goal of improving security and popularizing safe and secure card payment methods, and the IC/Magnetic Card Reader is the result of this collaboration.

Visa has been leading various security initiatives in Japan, including the deployment of a global standard for IC card transactions (EMV*2) to reduce fraudulent card use. With the changes to the rules*3 regarding the use of counterfeit cards in fraud in both Japanese domestic and worldwide transactions to be become effective in October 2015, Visa is initiating the implementation of EMV chip card issuance and EMV-enabled terminals on the acceptance side as an urgent priority. Visa is mandating that all new EMV terminals should be equipped with a PIN pad, and welcomes Rakuten's development of the reader terminal and today's announcement.

Rakuten launched Rakuten Smart Pay mainly for small- and medium-sized businesses and sole proprietorships in December 2012, offering a fast, low-cost card payment solution for a wide range of industry sectors which previously had limited card acceptance, such as restaurants and delivery service providers. To date, Rakuten has only handled card reader terminals capable of reading magnetic stripes, but by providing more secure payment solutions for the market, Rakuten has worked to develop an environment and terminals that allows both cardholders and merchants to use credit, debit and prepaid cards more safely and securely.

Rakuten is now launching the IC/Magnetic Reader that enables the authorization of the cardholder with chip and PIN through the smartphone payment service. The IC/Magnetic Reader complies with Visa's rule of equipping the terminal with PIN pad, and requires the cardholder to enter their 4 digit PIN code in place of their signature to authorize transactions on credit, debit, and prepaid cards.　The Rakuten Group has been has been implementing high-level security measures, including the adoption of IC chip-embedded cards, in Rakuten Card, the group's credit card, since July 2007.

Visa and Rakuten are committed to continuing to implement state-of-the-art security measures, such as the issuance of IC credit cards and the installation of EMV terminals, to provide a safer and more secure infrastructure and ensure the provision of correct security information and better understanding of security.

*1 The security of Rakuten's IC/Magnetic Reader is certified by international standards. In addition, the payment system used for Rakuten Smart Pay fully complies with the Payment Card Industry Data Security Standard (PCI DSS), the global standard for payment card data security protection. Rakuten has taken all security measures needed to enhance information security related to Rakuten Smart Pay.

*2 EMV, an acronym that stands for Europay, MasterCard and Visa, is a global standard for IC cards initially conceived by the three entities in 1994 and later adopted across the world.

*3 Effective October 1, 2015, Visa plans to apply Global EMV Liability Shift Rules which impose liability on companies not supporting IC chip cards or terminals for Japan domestic transaction and US, thus rolling out globally. Under the rules, if a magnetic transaction using a counterfeit IC card occurs at a magnetic stripe reader terminal, the issuer can hold the acquirer liable for the fraud loss incurred. Thus merchants that have IC terminals in place will be protected by acquirers from any liability arising out of magnetic transactions using counterfeit cards.

Product features:
(1)    Connection method: Bluetooth (wireless connection between smartphone and EMV terminal).
(2)    Global standards: Compliant with EMV Levels 1 and 2 and PCI PTS.
(3)    Strong security: Highly secure design that leaves no credit card data on the side of terminals.
(4)    High speed processing: Credit card processing speed of 1 to 2 seconds achieved by using smartphone lines and wi-fi.

Notes:
1. PCI DSS is a cardholder information security standard established by five international card brands.
2. PCI PTS is a security standard for card terminals established by five international card brands.
3. EMV Level 1 is global standard specifications to ensure the compatibility of IC card readers.
4. EMV Level 2 is global standard specifications defining IC credit card processing methods and other details.
5. Bluetooth is a registered trademark of Bluetooth SIG, Inc., U.S.

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