EMV-A Struggle to Find Consensus

The EMV Migration Forum issued a press release on July 2, following its most recent meeting in Chicago. The EMV Migration Forum is an industry group trying to provide guidance on the best way to implement EMV in the U.S.

EMV for the uninitiated is a security standard for debit cards thought to provide a higher level of protection against fraud than the current technology used for those cards. It is recognized in most industrialized countries with the exception of the U.S. and Israel.

While it sounds like a simple change, it’s actually extremely complicated because of the large number of stakeholders involved in the implementation process and the fact that many of them have competing interests.

According to the press release four of the mainstream payment industry participant groups (issuing banks, merchants, merchant acquiring processors and issuing processors) say they recommend a set of principles for implementing EMV PIN debit in the U.S. that would result in encoding a “single common U.S. debit payment application identifier (AID) on a debit card that represents each of the debit networks enabled on the card.” 

For U.S. PIN debit transactions initiated at POS and ATM devices in the U.S. this is a reasonable approach.  Where it would begin to break down is when consumers carry these cards issued by U.S. banks to Europe, Latin America or Asia where either POS or ATM routing will not include any of the debit network brands found in the US. 

Indeed, what do we find in Europe, Latin America or Asia?  MasterCard.  Visa.  American Express. 

U.S. retailers have expressed a desire for a single US debit application.  That is not the same thing as a single US debit AID.  The identifier is like a macro in Excel®, where the application is like Excel itself.  Here’s the kicker – the press release incorrectly states they want a single AID.  What they meant to say was they want a single application.  There will be multiple AIDs on PIN debit cards unless issuers all of a sudden decide to disallow their debit cards to be used outside of the US. 

Doubt that will happen. So the press release, rather than clarifying the issue, has added more confusion to an already confused situation.