Debit Network Consortium Selects Discover’s Technology to Resolve Debit Network-Routing Dilemma (March 21, 2013)
March 21, 2013
A troublesome roadblock to U.S. EMV adoption crumbled this week when 10 debit networks agreed to license a common U.S. debit application identifier (AID) from Discover Financial Services as the foundation solution for routing debit transactions under the EMV, or chip-card standard. The Secure Remote Payments Council’s decision resolves a stalemate that had taken center stage in recent months in EMV discussions as U.S. debit networks struggled to find a technology option for easily routing chip-based debit transactions under the Durbin Amendment, which requires that merchants have a choice of at least two unaffiliated debit networks. Pressure to reach a decision mounted as the payment networks’ deadline neared for U.S. acquirer-processors to be able to support EMV transactions as of April 1, 2013. The general liability shift for card issuers and merchants that have not adopted EMV is Oct. 1, 2015.
Discover in February hinted at its proposed solution to the dilemma, while industry discussions centered on alternative solutions Visa Inc. and MasterCard each proposed earlier this year. “Discover’s proposal is a proven and open solution that supports dual-interface—both contact and contactless transactions—and supports all cardholder verification methods and ATMs so merchants can easily adapt to it using existing processes,” Ian Hermon, a product marketing manager with security consulting firm Thales, tells Paybefore. Discover’s solution, which the payment network will license at no charge to the payment industry, also does not require debit networks to route transactions through Discover’s gateway, which observers say is another positive.
What’s in it for Discover? “The debit networks’ decision to adopt D-PAS demonstrates Discover’s leadership in the EMV space,” Troy Bernard, Discover’s global head of chip technology, tells Paybefore. And as one of the 10 debit networks participating in the debit industry consortium to find a common AID, PULSE also benefits from the move, George Danforth, PULSE’s director of emerging products, tells Paybefore. (PULSE is owned by Discover.) “The use of D-PAS by a majority of debit networks acknowledges our leadership in the space and allows all us to move forward now with EMV deployment plans,” he says.