Compliance with Debit Routing Rule Perks Up

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Even though the payments industry earlier this year put an end to the debate over how to comply with a federal mandate for routing EMV debit transactions, the technology still isn't widely available.

But payment processor and technology provider Vantiv Inc. says it will route an EMV debit transaction through a common application identifier (AID), successfully allowing a merchant the choice of two unaffiliated networks to process the transaction.

The Cincinnati, Ohio-based Vantiv, which is currently pilot testing with an EMV certification program, said the chip cards with the common AID will be available in January 2015 to the more than 200 credit unions and banks that will utilize Vantiv's technology. Vantiv will provide banks with Visa and MasterCard certified chip cards. Financial institutions using Vantiv's cards also have access to software, called Viable, for testing and certifying their entire infrastructure for EMV payments.

The common AID allows banks to comply with the Durbin amendment mandate for routing choices on debit transactions.

Vantiv's expertise in the EMV process will get chip cards to financial institutions quickly, while "simplifying merchant EMV testing and validation," Charles Drucker, CEO of Vantiv, stated in a press release.

Card brand executives who worked to establish the common AID for all payment networks view the first chip transaction using the technology as a key step in the U.S. process. "[It] is an important milestone in our journey toward chip adoption in the United States," Stephanie Ericksen, vice president of risk products for Visa Inc., said in the release. "Operationalizing a regulatory compliant chip solution for debit cards will help merchants and issuers adopt chip technology more quickly, especially important as we approach the 2015 counterfeit fraud liability shift."

The card brands have established an October 2015 timeline for the party not using EMV technology to be liable for fraud-related costs.

The debate over how common AID technology would be issued and governed came to a close in February when First Data and Visa agreed to share the technology, triggering a series of similar agreements between independent networks and major card brands.

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