In what its president says could be a "watershed event" in the debate over EMV debit transactions, the Secure Remote Payment Council has softened its stance to welcome Visa and MasterCard applications on EMV-chip cards.
In March, the council, which represents the regional debit networks, chose Discover's technology for a single common application identifier on debit cards. The payments industry must choose a common AID to meet debit-routing requirements set by the Durbin amendment.
The new proposal is significant only if all of the debit networks agree to the common AID and a common governing body to oversee its use, says Paul Tomasofsky, president of the Secure Remote Payment Council.
"The SRPc chip-and-PIN networks working group would like discussions to begin immediately to get us started on the path to implementation," he says.
So far, the council's concession has not been reciprocated.
"I can't emphasize enough that there is no agreement on this yet because Visa and MasterCard have to agree to the proposal," says Terry Dooley, chairman of the SRPc and senior vice president and chief information officer for the Shazam debit network.
Neither MasterCard nor Visa appears ready to rush into an agreement with the SRPc. Both networks indicated caution, while reiterating their positions to foster discussion and resolve the situation.
"At this point, we do not have a clear understanding of the SRPc proposal and therefore cannot comment specifically," MasterCard spokesman Seth Eisen states in an e-mail.
Since making its common AID solution available to all U.S. debit networks in January, MasterCard has engaged in "productive conversations with customers and others across the industry to allow issuers and merchants to move forward with their EMV plans in a simple and cost-effective manner," Eisen adds.
When the EMV Migration Forum made its common AID recommendation public, it was a position that supported the benefits of MasterCard's Maestro EMV application, Eisen says.
Visa has offered its common AID technology to debit networks with the goal of providing the efficiency and merchant routing capabilities that mag-stripe transactions allow, it says.
"Since proposing our initial debit solution, we have continued active discussions with a number of debit networks about how our approach to a common solution for Visa cards can help the industry move forward," Visa says in a prepared statement. Visa did not explicitly reference the SRPc proposal.
The council's proposal emerged during a recent EMV Migration Forum conference call, Dooley says. The forum, an independent body formed to study the EMV migration in the U.S. and develop common procedures, had issued its recommendation on July 1 for a common AID to handle multiple routing options on every card, potentially in addition to the card brands' own AID.
At the time, it was unclear if this proposal was taken into consideration by the card brands as they continued to work on business agreements to operate in a manner that the EMV Migration Forum members envision.
The SPRc's new proposal is "similar to what it was [with Discover's application] previously, but we are willing to utilize the Visa and MasterCard applications to service a common AID if the issuer chooses to do so," Dooley says.
The SRPc's proposal differs from the Visa and MasterCard proposals because of the desire for consortium ownership, rather than independent ownership, Dooley says.
"For the industry to move forward, it's pretty clear to see that a common governance is a key, but an agreement on that by all of the networks involved is a challenge," Dooley says.
The call for a common governing body "doesn't ask any one organization to concede," but rather for all to set aside ownership for the common good of the industry, he adds.
The sharing of technology remains the key factor for "a true compromise" to unfold, Tomasofsky says.
Visa and MasterCard will have to agree that the Visa Smart Debit/Credit application and MasterCard's MChip4 application would be underlying technology on a common AID to "share perpetually by all debit networks," Tomasofsky says.
For Discover, the SRPc would use an application called D-PAS for the regional networks' debit routing.