...you'll notice the STIP "Byte Code Interpreter" which is really nothing else but a Java VM. Atop of that block you'll see the reference to a STIP API.
Visa/MasterCard use STIP applets for their EMV model. The lower "Embassy" chart clearly indicates that the Embassy transaction engine is intended to do the key management for the STIP applets and life cycle management for native Embassy services.
If you really want to get excited read the following post/links about the scope of the key management:
Trusted Logic and Wave Systems have successfully leveraged their respective key strengths to create a product that meets the stringent requirements of secure Internet payment. "With this move, Trusted Logic adds another flavor to its Trusted Foundations software line, after an initial focus on the payment terminal industry," said Dominique Bolignano, president and CEO of Trusted Logic. "Our agreement with Wave Systems is in keeping with the company’s long-term strategy to timely provide key technologies for a multi-facetted Java-embedded market and reinforce our leadership position."