For quite some time now, there have been concerns over how major credit card issuers route debit payments. Both Visa and Mastercard have been scrutinized over their methods in the past. Visa modified their debit network routing rules earlier today, making it easier for the merchant to embrace EMV payments. These changes were made on request by the Federal Reserve.
Another Play To Boost EMV Adoption in The US
Despite best efforts by payment providers, US retailers remain unwilling to fully embrace EMV card payments. Unlike their swiped counterparts, EMV transactions are far more secure and require a PIN code to be entered, confirming a purchase. This new method reduces fraud risks, and adds no inconvenience to the transaction for either party. Using this new method does require a payment terminal supporting it, though.
Visa is looking at new ways to promote the usage of EMV payments across the United States. Through their updated and clarified debit network routing rules, the card issuer hopes to get more people on board. The Federal Reserve had requested Visa to make the necessary changes, and the company complied with these demands.
Debit routing on the VISA network takes place through two payment application identifiers on the card’s chip. On the one hand, there is the US Common Debit AID, which supports over a dozen domestic debit networks. Keep in mind that all of these networks are beyond the traditional Visa Debit offering, giving merchants plenty of choices to pick the best solution for their business.
What the new changes mean is that merchants can use this Common Debit AID exclusively to process US debit transactions if they prefer to do so. Moreover, a retailer doesn’t have to ask the customer which network they want to use for processing transactions. Apparently, there was a lot of confusion on that end.
But the biggest clarification comes in the form of how cardholders can use their favorite payment card. Merchants can prompt users to enter a PIN–as in, obligate it as a requirement–even though they must guarantee that the cardholder can also use the card without the code. It is pertinent to offer both types of payment options, yet it would be in the best interest of retailers to enforce EMV payments first and foremost.
For the consumer, there is no reason not to enter a PIN code when completing a purchase. Granted, there is the risk that payment terminals may become infected with malware, which may log PIN codes and card information. But if a card is swiped, the magstripe information can be recorded by the same malware. Entering the code is an extra layer of security.
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