After months of concern about MasterCard's April l9 liability shift for ATM owners accepting Maestro cards, the National ATM Council says it has established a workable solution with the card brand's offer of fraud screening.

But another ATM trade group isn't celebrating just yet.

In what National ATM Council executive director Bruce Renard calls "a meaningful move toward EMV in the U.S.," the council and card brand have agreed on a plan that calls for MasterCard to screen and block transactions at the ATMs accepting Maestro cards, which adhere to the EMV smart-card standard. April 19 is one of many dates along the path for the U.S. to fully convert to EMV cards from magnetic-stripe ones.

The council, a Jacksonville, Fla.-based trade association representing independent ATM providers and suppliers in the U.S, had previously asked MasterCard to postpone the liability shift because of a separate issue in routing EMV debit transactions. The council has had other disputes with MasterCard. In 2011, it sued the card brand over pricing issues.

To address the EMV liability concern, MasterCard plans to utilize its Fraud Rule Manager software to block internationally-issued Maestro card transactions on non-EMV ATMs "that averaged one or fewer cross-border Maestro transactions per month in 2012," according to an open letter MasterCard sent to the ATM industry on April 11.

Fraud Rule Manager will continue to screen and analyze authorization at the remaining ATMs that have greater historical cross-border Maestro transaction history, MasterCard says.

"If cross-border fraud at a specific ATM within this group should exceed a designated threshold level, MasterCard will adjust the applicable fraud prevention parameters to block transactions subject to the liability shift at that ATM for a reasonable period of time," the letter states.

MasterCard will work with ATM operators to establish that threshold, and the program will likely stay in place for as long as 18 months, with some flexibility, Renard says. Such a timeframe would be "about halfway between now and when EMV is fully in place [in the U.S.]," he adds. All ATMs must accept EMV products by October, 2016.

A major benefit to the council's members is that MasterCard will work with them to iron out problems if a specific ATM appears exposed to more fraud, Renard says.

The program does not change the April 19 liability shift, but Renard says his organization is confident that the close monitoring from MasterCard will keep fraud to a minimum.

"If this new agreement is not working as we planned, then MasterCard is willing to get back to the table to fix it," Renard says.

The ATM Industry Association may not fully embrace the National ATM Council's agreement with MasterCard, at least not until further review. The ATMIA was seeking an extension from MasterCard.

The ATMIA is "puzzled as to why the NAC's position on this issue has completely changed — and changed so quickly," says David Tente, executive director of the U.S. chapter of the ATMIA.

"My conversations with MasterCard going back to last September included discussions of their Fraud Rule Manager, which was still under development at that point in time," Tente says. "It was my understanding – and that of many of our members – that the tool was always intended to be available at no cost to ATM acquirers and operators who wanted to implement it."

The liability shift should remain a concern because fraudsters know how preventive measures work and they don't give up when a counterfeit card is declined at one merchant location or ATM, Tente says.

Essentially, ATMIA's position remains unchanged, Tente says.

"If MasterCard is so confident about the effectiveness of their tools, then perhaps MasterCard should be willing to assume liability for cross-border transactions until viable end-to-end EMV solutions are available and sufficient time is allowed for their deployment," he adds.

MasterCard plans to deploy Fraud Rule Manager on all non-EMV ATMs at no charge. An acquirer or ATM operator does not need to do anything to the ATM, the card brand's letter states.

MasterCard did not reply to questions requesting further detail on its stance.

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