Visa Inc. announced its support for a common U.S. debit solution and an expansion of Visa’s previously announced roadmap for EMV (Europay MasterCard Visa) chip card adoption in the United States to include a migration path for ATM transactions. To help facilitate chip adoption and issuer compliance with U.S. debit regulations, Visa plans to provide some of its proprietary EMV chip technology to the industry. This approach will simplify EMV chip implementation for debit, reduce migration costs and increase flexibility for card issuers, acquirer processors and merchants.
"Our world is demanding greater flexibility and security when it comes to paying for goods and services," said Jim McCarthy, global head of product, Visa Inc. "Visa’s expanded roadmap creates an environment in which new forms of electronic payment can flourish, offering security, convenience and flexibility to consumers, merchants, and issuers. As part of our commitment, we are offering the industry a common U.S. debit solution that will streamline implementation of secure EMV chip technology and advance the U.S. marketplace towards next generation payments, including mobile payments."
Facilitating Migration: Common Solution for U.S. Debit Chip Cards
Visa’s decision to support a common U.S. debit solution, which comes after thorough consultation with industry stakeholders, will encourage adoption of EMV chip and help to address the unique challenges posed by U.S. regulations that require debit card issuers to enable at least two unaffiliated network routing options on their cards.
Visa will make some of its EMV chip technology available free of charge in conjunction with a generic, unbranded Application Identifier (AID). This common approach will provide the most flexibility for issuers to manage their card portfolios over time while facilitating merchant choice for transaction routing and delivering a faster, simpler, more cost-effective implementation.
Merchants can continue to route debit transactions to their network of choice, just as they can with magnetic stripe transactions today. Issuers will continue to have the flexibility to change debit networks without having to re-issue cards. In addition, this approach will enable debit networks that do not have their own EMV chip solutions to support debit chip card transactions quickly and benefit from Visa’s tried and tested technology that already powers more than 800 million EMV Visa cards around the world. All transactions can be routed to the appropriate network using the same methodology used in today’s magnetic stripe environment. Visa will also make its technology and generic U.S. debit AID available to support ATM transactions.
"Visa’s proposal enables chip technology to support debit routing from the point of sale or the ATM, providing the same capabilities the industry relies on today in the magnetic stripe environment, with a streamlined approach that minimizes complexity and time-to-market," said Julie Conroy, Research Director, Aite Group.
Expanded EMV Chip Roadmap: ATM Liability Shifts in the U.S. and Asia Pacific
Visa also established a timeline to encourage acquirers to upgrade ATMs in Asia Pacific and the U.S. to accept EMV chip cards. Visa will assign liability for counterfeit fraud ATM transactions to the party – acquirer or issuer – that has not adopted EMV chip technology. If an EMV chip card is used at an ATM that cannot accept EMV chip-enabled cards, the ATM acquirer will bear the cost for counterfeit fraud. Currently card issuers bear the liability for fraudulent ATM transactions.
"Visa’s roadmap is designed to make the security and flexibility of EMV chip technology available to consumers and issuers in every environment, including ATMs," said Ellen Richey, chief enterprise risk officer, Visa Inc. "This new timeline balances the interests of issuers and ATM operators and provides time to include chip integration into ATM hardware upgrade plans. As a result, the entire marketplace can more quickly realize the strong security benefits of EMV chip technology in this critical channel."
Visa has established the following timelines for ATM transactions, across all Visa and/or Plus branded products:
- Effective April 1, 2015 – U.S. third-party ATM acquirer processors and sub-processors must be able to support EMV chip data
- Effective October 1, 2015 – Liability will shift in Asia Pacific, excluding China, India, Japan, and Thailand
- Effective October 1, 2017 – Liability will shift in China[1], India, Japan, Thailand, and the U.S.
Additionally, from April 1, 2013, a liability shift will apply to all qualifying transactions taking place in Australia and New Zealand. With liability shifts already in effect in Europe; Canada; Latin America and the Caribbean; and Central and Eastern Europe, Middle East and Africa; by 2017 Visa issuers and acquirers will be able to rely on a single global liability policy that encourages chip-on-chip (EMV chip card read by an EMV chip card reader) transactions at both the point-of-sale and ATMs.
Since EMV chip payment devices generate dynamic values that are unique to each transaction and that change with every use, chip technology adds an additional layer of security that helps significantly reduce card present fraud. By encouraging investments in EMV chip technology, Visa is encouraging improved international interoperability and security with dynamic authentication as well as helping to build a foundation for mobile payments.
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