A Finextra member 30 May, 2014, 08:16 0 likes

I’m surprised by the assertion that the Durbin Amendment has had such a fundamental effect on issuing banks – interchange payments in the United States remain at $45bn+ per annum and are the highest by far in the Western world so are still a huge source of income for banks. Moreover, if the card industry’s literature is to be believed, they can easily reclaim a lot of this by being “forced” to increase cardholder fees and the like.

With regards to EMV adoption, we see that the appetite for it from merchants and consumers is shifting from cynicism to a more reluctant acceptance. There will be definite benefits in terms of security and potentially interchange fees but also, as was the case in Europe, we expect it to take a long time and we expect the start-up costs to be heavy.

A Finextra member 02 June, 2014, 19:01 0 likes

The issue with rolling out EMV and the Durbin Ammendment in the U.S. is related to the fact Durbin requires the merchant to make the routing decision (so they can select the lowest fee) instead of leaving it to the issuer (as supported within the EMV standard).

The EMV Migration Forum Debit Working Committee has developed a white paper which defines recommended implementations for acquirers and issuers to ensure that routing for EMV transactions will be in compliance with the Durbin Ammendment routing regulation.  For more information, I recommend taking a look at the EMV Migration Forum (Smart Card Alliance) website.