The following corrects a misinterpretation of implementation dates in the previous version of this story. ATM Marketplace regrets any confusion caused by the error. The revised story also includes comments from ATMIA about the new deadlines.
This morning, Visa announced new liability shift dates for its EMV roadmap — these affecting third-party acquirers of ATM transactions. And for them, the Visa dates represent a move forward from the existing MasterCard timeline.
The Visa deadlines are as follows:
- Effective April 1, 2015, U.S. third-party ATM acquirer processors and sub-processors must be able to support EMV chip data;
- Effective Oct., 1, 2015, liability will shift in Asia Pacific, excluding China, India, Japan and Thailand;
- Effective Oct. 1, 2017, liability will shift in China (excluding domestic transactions), India, Japan,Thailand, and the United States.
Additionally, Visa said that a liability shift will apply as of April 1, 2013, to all qualifying transactions taking place in Australia and New Zealand.
Already, liability shifts are in effect for Europe, Canada, Latin America and the Caribbean, Central and Eastern Europe, and the Middle East and Africa.
According to Visa, the newly added dates ensure that by 2017, a single global liability policy will be in place that encourages chip-on-chip (EMV chip card read by an EMV chip card reader) transactions at both the POS and the ATM.
The first meaningful acquirer deadlines
Most in the industry expected that Visa, the first mover on EMV in the U.S., would eventually add ATM deadlines to its roadmap. However, most may have thought they had until the MasterCard liability shift in October 2016 to upgrade their acquiring systems up to EMV compliance.
The MasterCard plan had set an April 1, 2013 liability shift deadline (blanketing both acquirers and deployers) for transactions using Maestro, the company's European debit card brand. Until now, this was the only announced acquirer deadline for the ATM industry.
And it was not an especially meaningful one. For acquirers, the number of Maestro transactions at ATMs was negligible, and many questioned the need for a rush to implementation.
For their part, ATM deployers dismissed the Maestro liability shift as a non-starter without a business case to support it.
In an email last May, Jerry McCarley, executive vice president and CIO of USA Payments Systems, laid out the cost/benefit issues:
This [Maestro transactions] represents 1/10,000 of 1 percent of our transaction volume. No ISO is going to pay someone to make his ATM EMV compatible for this. They will simply elect not to take [Maestro].
For example, an ASO with 100 atms would have $36 a year in revenue off all his atms in surcharge from these cards (part of which the, ISO does not even get to keep) and it would cost him at least $20,000 to upgrade his 100 machines to EMV readers and software to support that $36 in revenue. So until there is a mandate that really affects them, no ISO will be spending any money on this.
Visa ATM upgrade dates fall later, but does it matter?
In September of 2012, MasterCard amended its roadmap to add a liability shift deadline for ATMs of Oct. 1, 2016 (MasterCard did not introduce a new acquirer deadline, apparently supposing that acquirers would have made their upgrades by the April 2013 deadline).
At that time of the MasterCard ATM liability shift announcement, Visa said that it had no intention of introducing ATM deadlines, and was focusing on EMV implementation at the POS. But over the last five months, Visa intentions changed — as most in the industry took for granted that they would.
Though the new Visa deadlines for ATMs do not take effect until October 2017— a full year after the MasterCard October 2016 deadline — Visa's establishment of a truly meaningful third-party acquirer deadline effectively squeezes that sector's upgrade calendars by six months.
ATM Industry Association executive director David Tente said that even the 2017 deadline might be overly optimistic, given the complex system upgrades involved.
"ATMIA is pleased to see that Visa’s new timetable for liability shifts in the U.S takes into account the added complexity of EMV migration at the ATM. Even though this is the latest of the announced ATM liability shift dates, larger deployers still do not expect to complete upgrades and replacements of their fleets until well past Oct, 2017."
Enabling 'faster, simpler, more cost-effective implementation'
Visa has also announced that in order to facilitate chip adoption and issuer compliance with U.S. debit regulations, the company plans to provide some of its proprietary EMV chip technology to the industry.
This approach will simplify EMV chip implementation for debit, reduce migration costs and increase flexibility for card issuers, acquirer processors and merchants, Visa said.
"Our world is demanding greater flexibility and security when it comes to paying for goods and services," said Jim McCarthy, global head of product at Visa Inc., in a statement about the announcement. "Visa's expanded roadmap creates an environment in which new forms of electronic payment can flourish, offering security, convenience and flexibility to consumers, merchants, and issuers. As part of our commitment, we are offering the industry a common U.S. debit solution that will streamline implementation of secure EMV chip technology and advance the U.S. marketplace towards next generation payments, including mobile payments."
Visa said it decided to support a common U.S. debit solution after "thorough consultation with industry stakeholders." The company said the move will encourage adoption of EMV chip technology and will help to address regulations imposed by the Dodd-Frank Act, including the requirement that debit card issuers offer at least two unaffiliated network routing options on their cards.
Offering free AID aid for ATM transaction acquirers
Visa will make some of its EMV chip technology available free of charge, relating to a generic, unbranded application identifier, or AID, that the company said will enable faster, simpler and more cost-effective implementation of EMV. This common approach would provide flexibility for issuers to manage their card portfolios over time while facilitating merchant choice for transaction routing. Visa will also make its technology and generic U.S. debit AID available to support ATM transactions.
This solution means that issuers will continue to have the flexibility to change debit networks without having to reissue cards. Debit networks that do not have their own EMV chip solutions will be able to support debit chip card transactions quickly and will benefit from a tried and proven technology. All transactions can be routed to the appropriate network using the same methodology used in today's magnetic stripe environment.
"Visa's proposal enables chip technology to support debit routing from the point of sale or the ATM, providing the same capabilities the industry relies on today in the magnetic stripe environment, with a streamlined approach that minimizes complexity and time-to-market," said Julie Conroy, research director at Aite Group, in the Visa announcement.
Repeated assurance: greater security, lower risk
Visa reiterated that EMV smart chip technology adds another layer of security, helping to reduce card-present fraud significantly. The company added that by encouraging investments in EMV chip technology, it is encouraging improved international interoperability and security, as well as helping to build a foundation for mobile payments.
It remains to be seen whether or when AmEx and Discover will follow suit with their own ATM implementation deadlines. But unless they move the deadline even earlier, the matter is essentially moot, given deadlines set now by the two largest card brands.
Read more about EMV.
ATM Marketplace will provide updates to this story as they become available.