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A common AID solution has arrived

May 3, 2013 by Terry Dooley — SVP & CIO, ITS, Inc

Recently, Jim Ghiglieri posted about an important topic, a common AID solution for the country's migration to EMV. I'd like to continue this discussion and will do so in a series of posts taking a deeper dive into the issues important to the critical nature of industry collaboration on EMV solutions. Below is the first of three posts. 

Among the challenges facing the U.S. migration to chip cards (commonly referred to as the switch to EMV), one in particular has loomed large: How will EMV transactions be processed in a manner that meets the unique regulatory and infrastructure needs of the U.S.?

Specifically, the U.S. must resolve the issues listed below before widespread adoption can be attained.

• Regulation II, or the Durbin Amendment 
• The competitive payments networks environment 
• Merchant routing 
• Issuer flexibility 

Interestingly, liability-shift deadlines have been instituted even as these outstanding issues exist. This underscores the need for all U.S. networks to work together to more quickly address the complexities of bringing all parties together to ensure the implementation is done correctly the first time.

Remember, Regulation II (often referred to as the Durbin Amendment) requires that two unaffiliated networks be available for all debit transactions, not just PIN-debit transactions.

The current implementation of EMV, including the certification requirements of certain EMVCo standards, does not allow the merchant to choose the route of a transaction. This is in direct conflict with the requirements of a Durbin-compliant EMV solution in the U.S.

Fortunately, the Secure Remote Payment Council's chip-and-PIN workgroup has announced support for a common application identifier and application for use in the U.S. Most importantly, the SRPc has support from ten of the largest debit networks in the country.

This is important because the ultimate goal of the workgroup is to find a chip-and-PIN solution that provides the same level of flexibility as magnetic-stripe cards have offered for networks, issuers, merchants, and acquirers.

In my next post, I'll discuss what will be required to successfully sustain this common AID and application.

Republished by permission from the Shazam Network Blog

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