CO-OP Financial Services has entered into an agreement with Visa to make the Visa EMV common debit solution available to its credit union clients.
The partnership follows the federal appeals court decision last month to uphold the Fed's debit interchange guidelines, a ruling industry insiders predicted would begin clearing the way for more decisions regarding debit routing as well as FI conversions to EMV.
Prior to the court case being decided, debit decisions were on hold due in part to the legal wrangling making it unclear how many unaffiliated networks would be required on each card for debit routing. The Fed's rule set the number at two, however Judge Richard Leon's decision last year to strike down Fed's interchange guidelines created the possibility four networks would be required.
CO-OP Financial Services explained the long-term agreement between CO-OP and Visa enables development of regulation-compliant debit EMV solutions using a common application identifier (AID). A major roadblock to EMV has been that chip cards are not set up to accept multiple unaffiliated payments networks, a problem a common AID resolves.
CO-OP stated that some development will still need to be done at POS and ATM terminals in order to choose the common AID.
"This is a major advance in adoption of the EMV standard for debit card transactions in the United States, providing a clearer migration path to EMV for our debit issuers and ATM owners," says Stan Hollen, CO-OP president and CEO. "CO-OP has been working hard to move the payments industry to an EMV common debit solution, both independently and through our participation in the Debit Network Alliance."
The Visa EMV solution provides portability for debit card issuers, and network routing choices for merchants and ATM acquirers. It also supports all transaction types, including contact and contactless.
Another major sticking point in the U.S. shift to EMV has been whether issuers should require consumers to use a PIN to make EMV payments. Visa has openly supported using signature authentication as an easier and cheaper method to deploy.