The migration to EMV cards in the United States remains complicated by the unresolved legal issues surrounding the Durbin Amendment's implementation.
Visa is "mindful of the stress this is creating," said Bob Whyte, Visa's head of consumer debit products in North America, adding that "one of the highest, if not the highest, priorities at Visa is to understand this relative to the uncertainty" of Durbin.
Without going into specifics, Whyte suggested that Visa may soon issue additional guidance related to EMV adoption timelines. The U.S. migration to EMV-chip cards was affected by a court ruling challenging the Federal Reserve Board's implementation of the Durbin rule, which requires additional routing options for debit transactions.
Whyte spoke on a panel of card network executives at the PaymentsSource ATM, Debit and Prepaid Forum, ongoing this week in Las Vegas.
Whereas Visa's Whyte presented a tone of reassurance, other network executives were critical of the U.S.'s troubled shift to EMV.
"EMV is the classic solution in search of a problem," declared Dave Schneider, president of Discover Financial Services' Pulse Network.
"EMV is a dated technology. It was designed to solve a problem in certain parts of the world that had telecom issues and other challenges," he added. "It doesn't solve problems related to fraud in the card-not-present world."
However, the fraud risks that EMV deters and the standard that's been created in other countries makes the U.S. transition a timely imperative, argued Leland Englebardt II, MasterCard's group head of global network products.
"The current regulatory environment and judicial element in the debit space inject issues and barriers to making this investment and it's a substantial investment," he said. "But in MasterCard's view, it is not an investment that can or should be deferred because the consequences of not doing it will be serious for the integrity of the U.S. payments scheme."
"The fraudsters are already shifting their global activity to the United States because it is the weakness link in the payments chain," he added.
MasterCard set an April EMV liability shift for ATMs that accept transactions initiated through internationally-issued Maestro EMV chip-cards. By the end of 2013, approximately 10% of the ATMs in the U.S. will be EMV-enabled, Englebardt said, adding that it's a "pretty remarkable" achievement that's already providing positive results.
"What we're seeing is a material reduction in cross-border counterfeit fraud and that's the payoff for the entire industry," he said.
The Durbin Amendment, which required caps for debit interchange, is causing other industry challenges, particularly for exempt institutions with less than $10 billion in assets, who have seen their interchange revenue decrease since the law's implementation, said Jim Hanisch, executive vice president of the Co-Op Network.
Neil Marcous, president of Nyce Payments Network, said the Fed's appeal of a recent court ruling may have an outcome that requires debit cards to support two signature networks.