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Update: The EMV common debit solution

Getting 4 AIDs into place (if that's what it comes down to) is going to take some skill.

July 29, 2013

by David Tente, executive director, ATM Industry Association US

There have been so many announcements recently with respect to development of a "common debit solution" for U.S. EMV migration, that it has become very confusing for the casual observer — which is the category that most of us fall into. 

I thought it might be worthwhile to try and condense it all down and connect the dots — hopefully helping other "casual observers" get a better sense of where we are today.

It is well known that creating an EMV debit solution that addresses Dodd-Frank/Durbin requirements has been an ongoing priority for the industry. Although routing choice requirements do not apply to ATM transactions, the final solution will have an impact on ATM operators.

In order to ensure that the ATM industry's needs are part of all relevant discussions, an EMV Migration Forum ATM working committee was formed earlier this year. That effort was led by the 30-plus members of the EMF who are also members of ATMIA.

Earlier this month, the EMF announced that the forum had reached a consensus on the need for using a single application identifier that represents each of the debit networks enabled on any given card.

Part of the reason for this is that the EMF sub-group working on a "tag" solution concluded that implementation of a tag to facilitate multiple debit AIDs on a card may be far too complex to be practical. Nevertheless, the group expects to release a white paper that discusses what would be required for such an implementation.

Over the course of the past 6–8 months, there have been multiple announcements about proposed debit solutions from MasterCard, Visa, and the Secure Remote Payment council. Both Visa and MasterCard have continued to expand and "improve" their offerings. 

At this time, three different solutions using a single AID are being offered — one each from MasterCard, Visa and SRPc. It was announced at the last EMF meeting that MasterCard and Visa have reached an agreement in principle to use each other's technology. Both indicate that business agreements are still being developed.

It appears that all three solutions will include multiple regional networks; however those business relationships are also still in progress. SRPc is said to have 10 regional networks already on board and discussions underway with at least four others.

What this means is that, today, there are three possible solutions a card issuer could choose from that use a single AID and offer routing choice in conformance with Durbin.

All three of those solutions, though, still suffer from the same inadequacy — none of the cards would work on all terminals — unless all issuers, merchants, and operators happened to choose the same solution.

Such a major lack of interoperability would obviously be an untenable situation for the industry. Everyone is aware of that fact and hopeful that the necessary business relationships will be forged. Issuers are also quite adamant that any solution adopted by the industry must provide portability — the option at any point to change network relationships without the need to perform an immediate and wholesale reissuing of cards.

The latest development comes from last week's meeting of the EMF debit working committee. In an effort to find a compromise, SRPc has proposed joint ownership and management of four AIDs and applications. Such an arrangement would permit all four AIDs to be resident on all terminals, and issuers to select the one AID of those four that will be used with their cards.

Since most of the networks are already going down similar paths, in one respect or another, this may be an expedient and workable solution. The only alternative providing a similar result would be for all of the networks to participate in all of the other proposed solutions.

Several major retailers have already announced decisions to accept only cards with a single AID. 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.

This is a very dynamic issue that is likely to go through additional iterations before a final solution is agreed upon. However, I remain very optimistic that we will get to that point. A lot of very talented and resourceful people are working to make it happen.

David Tente is the executive director of the United States chapter of the ATM Industry Association. He is also a member of the EMV Migration Forum and of the forum's ATM working committee.

Read more about EMV.

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ATM Industry Association (ATMIA)

The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.

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