Debit Networks Continue to Adopt MasterCard, Visa Common AID Solutions for EMV/Durbin Problem
April 7, 2014
The proposed solutions from the major card networks to solve the Durbin Amendment/EMV conundrum gained momentum last week as First Data’s Star Network said it would use MasterCard’s solution and the NYCE network signed on with Visa. The major U.S. debit networks had been exploring an industry-wide solution that would not require them to use proprietary technology from the card brands, but high-profile security breaches at several major retailers took EMV implementation off the back burner. The debit networks found they quickly needed to resolve conflicting mandates in the card networks’ EMVco technology specs and federal regulations established under the Durbin Amendment.
Star now has agreement with MasterCard and Visa to license the common AID technology. NYCE, Star, Fiserv Inc.’s Accel, Discover Financial Services’ Pulse, its own Interlink PIN-debit network, and MasterCard’s Maestro networks also have struck deals with Visa. In addition to Star, Accel and Interlink so far have signed agreements with MasterCard.
The deals mean the issuers can use a “common application identifier” in EMV cards, as they are currently configured, and still abide by the Durbin Amendment’s requirement that merchants have access to at least two unaffiliated debit networks ( which an appeals court recently upheld ). Common AID had been identified as a solution to the problem almost as soon as Durbin was passed into law, but wrangling between who would control access to the technology had held up agreements and, consequently, EMV adoption.
There had been somewhat of a stalemate between the networks and a group of debit networks working together until news broke of the Target and Neiman Marcus breaches. The resulting publicity turned into a groundswell of support for EMV which has prodded the debit networks into accepting Visa and/or MasterCard solutions, both which had technology ready to go.
“In the last few months we have seen a dramatic shift in the interest and understanding of the benefits that EMV chip cards provide, particularly in helping to lessen the impacts of payment data breaches and to prevent counterfeit card fraud,” said Randy Vanderhoof, director of the EMV Migration Forum at the group’s most recent meeting. “As a result, the U.S. migration is accelerating and there is a refreshed urgency in resolving issues and moving forward as quickly as possible.”