MasterCard and Visa have agreed to license their respective common US debit technologies to each other to help ease the migration from mag-stripe to EMV chip cards.
Visa, MasterCard, Discover and American Express have laid out a roadmap for the migration to EMV in the US, with liability switching to retailers that have not upgraded in October 2015.
To make the transition easier, Visa and MasterCard have now made certain proprietary EMV chip technologies available to each other and other networks. This means that a debit chip transaction originating from a single chip application can be routed by the merchant to Visa, MasterCard or any other US PIN debit network that signs up.
Issuers will be able to load their global brand's application onto their cards - either Visa or MasterCard - and flexibly enable transactions to route over any participating PIN debit network within the US.
Chris McWilton, president, North America, MasterCard, says: "By providing every US debit network with an efficient, market-ready answer, we are delivering a proven solution that not only preserves merchant routing choice, but ensures seamless interoperability with all other EMV programs across the globe."
Elizabeth Buse, global executive, Solutions, Visa, adds: "Importantly, this solution allows merchants and acquirers to deploy payment terminals using existing chip technologies that are already widely integrated into existing chip card acceptance solutions."
In March, Discover beat out competition from MasterCard and Visa to win the support of ten debit networks to provide a common debit application identifier for the EMV migration to EMV Chip and PIN. The ten debit networks - AFFN, ATH, CO-OP Financial Services, Jeanie, Nets, Nyce, Presto!, Pulse, Shazam and Star - will license the D-Payment Application Specification from Discover - as a common platform.
This creates a tricky problem for card issuers, as lack of interoperability between the Visa/MasterCard AID and SRPC's equivalent would make it difficult to change network relationships without the need to perform an immediate and wholesale reissuing of cards.
In an effort to find a compromise, SRPC has proposed joint ownership and management of AIDs and applications. Such an arrangement would permit all AIDs to be resident on all terminals, and issuers to select the one AID that will be used with their cards.
David Tente, executive director, of the US ATM Indisutry Association believes this may be an expedient and workable solution.
"Several major retailers have already announced decisions to accept only cards with a single AID," he says. "So it would seem that, although the solution that gets us there is yet undetermined, there will likely be only one AID on debit cards."