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Report offers practical guide to EMV debit transaction process

A report by Mercator follows the post-EMV routing of nine debit types from payment selection through authorization response.

August 31, 2015

Recent processing changes, new technologies, and incentives have all had a material impact on the way debit transactions are routed.

A new research report from Mercator Advisory Group, "Debit Transactions in an EMV World: A Practical Guide," follows each of nine debit transaction types at a business level — from the point when a consumer makes a payment selection to the authorization response.

For each of these transactions, the report identifies network type, form factor, CVM, message type, and environment influencing the path of the transaction.

Additionally, the document includes a process flow diagram that shows key points in the process, identifying the participants and briefly describing each point.

Following each flowchart is an explanation of how recent events have affected each transaction type — and how possible future changes might result in even more change.

"With the advent of the EMV migration, tokenization, and commercialization of mobile payments, managing change becomes critical," said Sarah Grotta, debit advisory service director at Mercator, and author of the report. "Understanding the existing payments infrastructure and how it works at a fundamental level will be critical to those with payment-related businesses to protect and grow

Highlights of the 22-page report include:

• a detailed review of 9 debit transaction types and how they are processed;
• analysis of the impact of Dodd-Frank PIN debit transactions;
• a review of Visa's PIN Authentication Visa Debit product and merchant incentives; and
• a look at the roles of Visa and MasterCard in tokenization vault services, and their potential impact on mobile payments.