Will uncertainty about debit routing delay MasterCard EMV dates?

Ever since the July 31, 2013, ruling by Judge Richard Leon that struck down not only the Fed's fee cap rules but also its debit routing scheme, the payments industry has debated the question, "Will MasterCard back off its EMV liability shift dates until the routing issue is resolved?"

In a Jan. 8 letter to financial institutions, merchants and others in the payments chain, Chris McWilton, MasterCard president for North America, mooted all debate with one word: No.  

In the letter, Wilton pointed to the breach of Target data security systems — now thought to have compromised 110 million cardholder accounts, as well as those customers' personal information — as a compelling reason to proceed toward EMV implementation per the company's original schedule:

This migration is about an upgrade that will drive both innovation and security for all of us and, more importantly, consumers and cardholders. The fraud liability shifts we have announced provide incentives to migrate to EMV and not a mandate. Over the past two years, we have been impressed with how the industry has come together to prepare and plan for this migration.

That is why we will keep our 2015 liability shift dates – to help maintain this momentum and address the larger fraud threat.

As we’ve seen recently, the fraudsters will not delay their activities. Any delay in the liability shift dates would potentially increase the U.S.’s disproportionate share of the world’s fraud losses.

Wilton also pointed to resources MasterCard has offered to assist the industry with EMV implementation, including a streamlined testing and certification process, and a solution — provided at no cost — to enable routing of PIN debit transactions over multiple unaffiliated networks.

Wilton acknowledged the uncertainty surrounding debit routing, but did not allow that the Leon ruling necessitated a delay in EMV implementation:

None of us can ignore the possibility of future changes to U.S. debit routing requirements. While the landscape may look differently in months or years, we cannot stop progress because there is too much at stake for all of our customers.

The full text of Wilton's letter is viewable at the MasterCard website.