Card standards body EMVCo is introducing a common payment application (CPA) specification for debit and credit card processing in an effort to lower costs and ease the migration burden for banks switching to EMV-based smart cards.
EMVCo, which was set up to manage and maintain the global chip card specifications, says development of the specification represents a co-operative effort by Japanese card issuer JCB along with MasterCard and Visa.
JCB acquired a one-third ownership in EMVCo last year and now has an equal interest in the organisation along with MasterCard and Visa.
The new standard will cut the cost and complexity of migrating to chip-based cards, say the companies.
Gaylon Howe, EVP of consumer product platforms at Visa and chairman of the EMVCo executive committee, says: "The purpose of the CPA specification is to streamline smart card processing for issuers as well as vendors and service providers. By standardising the payment application used among payment systems, CPA benefits vendors who will not have to duplicate their development or maintenance efforts and supports more cost effective products and services overall.
"CPA also enables issuers to enjoy the benefits of multiple vendors for chip cards and improved interoperability. Thanks to these many benefits, CPA ultimately has the potential to lead to significant cost savings for Issuers migrating to, or already deploying, EMV."
In addition to the commonality, the CPA standard also provides enhanced card risk management controls which allow issuers to apply specific risk management profiles based on the type of transaction. The specification also defines all data elements and logic used by the payment application.
Art Kranzley, EVP, advanced payments, MasterCard International and member of the EMVCo executive committee, says following publication of the CPA specification, EMVCo will retain ongoing responsibility for the maintenance of the standard, including the development of test requirements and the establishment of a functional and security testing process for cards containing CPA, which will be available in 2006.