CFPB Data Mining Draws Concern in Congress

by Mercator Advisory Group 0

In a decision that’s striking because of its cooperation among non-card brand competitors, the major United States EFT debit networks have aligned themselves to support a common debit application identifier in support of multiple-network capabilities on EMV cards.

The networks, which represent an estimated 50% of PIN-debit transactions, chose Discover to provide the technology necessary to accomplish dual-routing support as required by Regulation II based on criteria outlined in a press release:

This decision is the culmination of months of evaluation of several proposals – including the most recent AID proposals by MasterCard and Visa. Evaluation criteria included: maintaining routing choice and network portability; availability of all cardholder verification (CVM) options; inclusion of point-of-sale and ATM transactions; support of contact and contactless transactions; ability to make future enhancements to the solution; inclusion of both current and emerging debit channels; and governance parity.

Comprised of participants in a Working Group organized by the Secure Remote Payments Council, debit networks participating in this announcement include AFFN, ATH, CO-OP Financial Services, Jeanie, NETS, NYCE, Presto!, PULSE, SHAZAM and STAR, which have agreed to:

“…adopt a common U.S. debit application identifier (AID) and work with Discover Financial Services to license the D-Payment Application Specification (D-PAS) as the foundation of the common U.S. debit chip payment solution. The Workgroup will also evaluate enhancing the specification’s security by including the one-time card number technology developed by First Data / STAR specifically to mitigate impact from skimming and data breach frauds.”

Some would say this is a long overdue alliance at the EFT network level and is a result of one of the more significant unintended consequence of the Durbin Amendment to date. If successful, this might portend further alliances in support of more portable cash-replacement products, for example. In addition, this places Discover in an organizing role for the larger industry, underscoring its potential to introduce a new balancing point to market participants that is also an equally capable technology partner. First Data also stands to enhance their position as a trusted security technology provider if the group decides to adopt its proxy card number technology.

If successful, this development should clear the way for issuers to begin formulating plans to issue EMV debit cards in the United States with more confidence.

Click here to read more from the press release.

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