Discover Financial Services’ Pulse PIN-debit network has joined the card brand’s EMV migration timetable, establishing requirements for point-of-sale acquirers and processors to handle smart-card payments.
Visa, MasterCard, Discover and American Express have all released similar timelines for the U.S. shift to the EMV chip-card standard, which improves security over magnetic-stripe cards. Many other countries already handle EMV cards, also called chip-and-PIN cards for their common use with a PIN.
The Pulse electronic funds transfer network joins the Discover Network, Diners Club International and Discover Card in establishing EMV deployment dates effective for the U.S., Canada and Mexico. Discover, of Riverwoods, Ill., announced its original timeline March 12.
Pulse will follow Discover’s fraud-liability shift effective dates of Oct. 1, 2015 at point-of-sale terminals and Oct. 1, 2017 at gas station fuel dispensers. Companies that do not accept EMV cards by those dates face liability for fraud on card payments they handle.
Pulse will also require U.S. direct-connect merchants and point-of-sale acquirer processors to support EMV data by Oct. 16, 2013, the network says.
Pulse will incorporate Discover’s D-Payment Application Specification to enable EMV transactions at the point of sale. D-PAS supports all cardholder verification methods, and the network’s U.S. EMV implementation should feature broad support for online PIN-authenticated transactions, Discover says.
Pulse collaborates with other debit networks and industry work groups to facilitate interoperability among card brands and to enable merchants to route debit transactions consistent with new federal requirements.
Even with EMV adoption timetables in place, PIN-debit networks such as Pulse and others contemplate their roles with chip-and-PIN migration and new federal rules regarding interchange rates and the end of network exclusivity.
“This announcement covers debit point-of-sale transactions, which was not previously included in our March announcement,” says Discover spokeswoman Laura Gingiss.
In addition, Discover has “filled in the blanks” about how the liability shift will work and when merchants can earn Payment Card Industry audit waivers for meeting certain EMV acceptance requirements, Gingiss says.
Discover expanded upon its previous fraud liability shift policy announcement in March by explaining it will enforce “a risk-based payments hierarchy that benefits the entity leveraging the highest level of available payments security.”
Discover also revealed that starting October, 2013 it will grant annual PCI audit waivers for merchants that process 75% of Discover Network transactions on terminals supporting both contact and contactless payments. These waivers do not eliminate merchants’ need to comply with the PCI data security standard, though the new rules ease the burden merchants face in validating their compliance.
When Discover announced last March that its EMV timetable would fall in line with other card brands, company executives said they would allow merchants to choose between chip-and-PIN or chip-and-signature technology.
However, many merchants remain unsure of what to do because the card brands hold different stances on whether to encourage U.S. merchants to use PIN codes with EMV cards.