Members of the EMV Migration Forum are recommending a single common debit code for EMV transactions in the U.S. and plan to provide details later this summer for how the payments industry can implement it.
The July 1 statement from the EMV Migration Forum marks its first unified stance since the organization took up the debate about chip-card debit transactions more than a year ago. In the statement, the industry group advocates for the use of a single common U.S. debit payment application identifier, or AID, on a debit card that represents each of the debit networks enabled on the card.
"If this approach is adopted as recommended, no additional complex tags are necessary for U.S. debit implementation, as would be required with a multi-application approach," the statement reads.
The forums statement, which comes shortly after its most recent meetings concluded in Chicago on June 28, adds that merchants, issuers, merchant acquirers and processors involved in the forum are making the recommendations to reduce the complexity of U.S. EMV implementation and to facilitate a positive consumer experience.
The industry has been working to define an approach for U.S. EMV debit implementation that would not require complex processing at the point of sale and complex personalization and management processes, says Cathy Medich, director of programs for the EMV Migration Forum.
Many proposals and approaches have been discussed over the past year, including single and multiple application identifiers, Medich says.
Forum members have addressed the EMV debit transaction dilemma since the Durbin Amendment was included in the Dodd-Frank Act, calling for merchants to have at least two debit networks to choose from for routing transactions. Such a mandate created the need for new coding on debit cards, because the U.S. will represent the only country using EMV smart cards that has more than one debit network in operation.
The recommendation came about after many in-person meetings, weekly phone meetings over several months, and thousands of hours of evaluation and analysis of the technology and use-case scenarios, involving a broad cross-section of industry stakeholders, the statement notes.
Less than a month ago, stakeholders with the EMV Migration Forum were having meetings to prepare themselves for the potential scenarios that three codes on a debit card would create for merchants, issuers and processors.
Having key stakeholders within the EMV Migration Forum agree on an approach and recommend a single common U.S. debit payment application identifier is a significant step to move the industry forward with more detailed implementation planning, Medich adds.
The forums stance on the single code does not represent an endorsement of a specific networks technology. We believe that a single common U.S. debit payment application identifier would work with all of the solutions currently being offered, Medich says.
The support of a single code also does not mean that the EMV Migration Forum is aligning itself with the Secure Remote Payment Council, which represents the independent debit networks and has come out in favor of Discovers technology.
Rather, the forums statement simply means the EMV Migration Forum membership has agreed on the need for a single code and it marks a first step toward having an approach that satisfies all stakeholders with a solution that is more straightforward to implement, Medich says.
We plan to document additional detail on the debit implementation approach so that its clear to industry stakeholders what the approach is and how it would work in various scenarios, Medich says. We expect to have additional information later this summer.
While the EMV Migration Forum was holding its meeting last week, the Merchant Advisory Group issued a statement reiterating its stance that a single debit code is essential.
The merchants group was particularly concerned about those recent indications that many stakeholders were content with using three debit applications Discover, MasterCard and Visa technology and accepting the October 2015 network timeline for an EMV liability shift.
A vast majority of the stakeholders including merchants, issuers, consumers and the regional PIN debit networks are best served by using a single domestic debit application with all debit networks participating, the advisory group states.
A single application is much simpler to implement for merchants and would preserve merchants' legal rights under Reg II, the group states.
Issuers would preserve their ability to move seamlessly between networks without the need to reissue devices, the group says.
In addition the merchants stated the October, 2015 date is completely unreasonable given the inability of the networks to resolve the debit issue.