U.S. EMV Migration Efforts Continue Despite Debit Regulatory Challenges

News from the EMV Migration Forum

Princeton Junction, N.J., October 3, 2013 – Following its first anniversary as an organization, the EMV Migration Forum and its payment industry members are continuing to work together on advancing the move to EMV chip technology in the United States, despite uncertainty concerning implementation of U.S. regulations governing debit.

The EMV Migration Forum, a broadly supported cross-payments industry organization, was formed in summer 2012 to address issues that require broad cooperation and coordination across the payments space in order to successfully introduce secure EMV payments technology in the United States.

At September’s gathering of more than 200 individuals from among its 148 member organizations, members discussed EMV migration developments, including the implications of the recent court decision to overturn the Federal Reserve Board’s implementation of the Durbin Amendment and the Fed’s subsequent appeal of the ruling.  Many had questions about what impact this will have on U.S. EMV migration.

“While some Forum members arrived at the September EMV Migration Forum meeting uncertain of the impact the court ruling on debit would have on the EMV rollout, this meeting demonstrated stakeholder commitment to continue moving forward to achieve the benefits of EMV technology – reducing fraud, promoting global interoperability, and providing a path to future payments innovation. This commitment runs far deeper than just overcoming current debit challenges,” said Randy Vanderhoof, executive director of the EMV Migration Forum.  “Members were enthusiastic about other Working Committee projects, with new members joining ongoing projects and new projects being launched.”

At the meeting, sessions included: an educational presentation from EMVCo on global adoption and new initiatives being worked on; a transit agency briefing on the unique payments requirements for transit and EMV; an “EMV 101” tutorial session; general and project meetings for members of the Forum’s six Working Committees; and two Special Interest Group meetings for merchants and issuers. Working Committee chairs reported on the progress of their projects, including:

  • Communications & Education Working Committee is defining the requirements for an online Knowledge Center that will place relevant educational resources on EMV in one place.  The committee is also developing messaging guidelines to help payments stakeholders communicate with their customers on the U.S. EMV migration.
  • Testing & Certification Working Committee is producing a white paper that describes issuer testing and certification best practices when moving to chip card issuance.  In addition, an acquirer subgroup has been formed to provide recommendations to the industry on how to streamline the merchant testing and certification process.
  • U.S. Coordination Working Committee is currently exploring ways of generating efficient and consistent operations and messaging across the industry through a potential “Phase 1” EMV rollout.
  • Card-Not-Present Fraud Working Committee is preparing a detailed outline for a white paper on best practices for mitigating card-not-present fraud.  They have completed an assessment of eCommerce authentication methods and are now reviewing fraud tools that are used by merchants, issuers and acquirers to detect fraud.
  • ATM Working Committee has formed multiple subgroups that are working together to identify and address ATM-unique issues with EMV migration.
  • The Debit Working Committee hosted a special educational session on EMV debit implementations in Canada, UK, Australia, and New Zealand.

Impacts of Court Ruling on Debit

While the original Fed debit regulation remains in effect for now, the recent court ruling to overturn that regulation has implications for the rollout of EMV debit in two main areas: debit interchange fees, and debit transaction routing choices for merchants. The Fed has appealed the court’s ruling.

Vanderhoof commented, “While the court’s decision to overturn the current interchange ruling affects transaction economics, the court’s ruling regarding debit transaction routing requirements has the bigger impact on planning for EMV migration.  It calls into question whether at least two debit routing choices are required for each card, or for each transaction.  This can impact the technical implementation of EMV for debit and its multiple industry stakeholders.”

How Payments Stakeholders Can Act Now

The September meeting reinforced that the Forum and the industry have made a lot of progress, and there is still a lot to be done for migration that is not impacted by the debit issues addressed by the court.

In particular, there are many actions that industry stakeholders are taking to move the migration forward, and can be taking if they are not doing so already, including:

  • Educating themselves on EMV technology and implementation choices
  • Determining strategies for EMV card issuance (issuers) and acceptance (merchants)
  • Assessing their current infrastructure and determining appropriate changes
  • Developing a project plan for implementing EMV

Issuers, specifically, are making decisions about whether to support both online and offline transactions, different card verification methods, and issuance of contact-only or dual contact/contactless technology cards.  Issuers are planning the phasing and timing of issuance for each type of card and cardholder group within their portfolios and, when ready, beginning issuance of EMV-enabled cards.

Merchants, specifically, are examining their current acceptance infrastructure and determining changes, deciding whether to support both online and offline transactions, and evaluating hardware choices.

“In terms of debit, while there are uncertainties about how it will play out, stakeholders continue to have strong interest in understanding and discussing the previously recommended debit routing options to better understand the requirements of issuers, merchants and acquirers,” said Vanderhoof.

Continued Educational Focus

Because the United States is diverse, has a larger scale than other countries and is expected to embrace multiple strategies (e.g., both chip and signature and chip and PIN implementations) for implementing EMV based on issuer and merchant preferences, education on EMV implementation choices is critical.  The EMV Migration Forum will begin to devote more time to providing the critical education that payments stakeholders require.  To this end, the Forum will continue to meet regularly for a combination of educational sessions and working committee project meetings, and will develop additional educational resources on its website.

The Forum Working Committees include over 400 participants and meet weekly or biweekly for project meetings; all members are welcome to participate.  The next in-person meeting is on December 11-12 in Coral Gables, FL.  A website, www.emv-connection.com, has been established to provide valuable information and resources for issuers, merchants, acquirer/processors, and consumers.

About U.S. EMV Migration

Commonly used globally in place of magnetic stripe, EMV chip technology reduces card fraud in a face-to-face card-present environment; provides global interoperability; and enables safer and smarter transactions across cards and contactless channels. American Express, Discover, MasterCard and Visa have all announced their plans for supporting an EMV-based payments infrastructure in the U.S., with acquirer processor readiness mandates to support chip data in place for 2013, and liability shifts for managing fraud risk in a face-to-face environment set for 2015.

About the EMV Migration Forum

The EMV Migration Forum is a cross-industry body focused on supporting an alignment of the EMV implementation steps required for global and regional payment networks, issuers, processors, merchants, and consumers to ensure a successful introduction of more secure EMV contact and contactless technology in the United States. The focus of the Forum is to address topics that require some level of industry cooperation and/or coordination to migrate successfully to EMV technology in the United States.  For more information on the EMV Migration Forum, please visit http://www.emv-connection.com/us-payments-forum/.


Megan Shamas
Montner & Associates Tech PR Agency
[email protected]


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