First Data has completed a licensing agreement with MasterCard to enable EMV debit MasterCards to work on the Star Network.
By incorporating MasterCard's common application identifier (AID), card issuers will be able to include Star as one of multiple network routing options. The Durbin amendment requires at least two unaffiliated networks for debit transactions.
In late February, First Data entered a separate debit-routing agreement with Visa.
"First Data again demonstrates its leadership position in the advancement of EMV in the U.S. with Star being one of the first debit networks to assist issuers, acquirers, and merchants with equal access to a shared EMV chip card technology, without restrictions on cardholder verification methods," Barry McCarthy, president of First Data financial services, says in an April 3 press release.
The card networks are pushing most U.S. merchants to accept EMV-chip cards by October 2015. Those who miss the deadline face an increase in fraud liability. The chip-based cards provide added security against counterfeiting compared to magnetic stripe technology.
Nearly a year ago, MasterCard and Visa sought to ease concerns of independent debit networks when announcing they would share their common AID technology.
Since then, both have offered long-term licensing agreements on the common AID as free technology capable of handling all authorization methods. More important, they included each other's debit network on the common AID.
As a result, when licensing agreements between the major card brands and network operators unfold, Visa and MasterCard issuers will have one application that shares two application identifiers on debit cards.
On a MasterCard card, for example, one identifier is for MasterCard transactions, while the other is the common AID for Visa's Interlink, MasterCard's Maestro, Fiserv's Accel and First Data's Star networks.
As other debit networks adopt the major card brand's EMV debit technology, they would be added to the common AID.
The U.S. payments industry faced a unique dilemma in complying with the Durbin mandate. No other country deploying EMV smart cards to configure coding for multiple networks.