Visa Changes EMV Debit Card Routing Process amid Federal and Merchant Pressure
Visa has modified and clarified debit network routing rules, following recent FAQ guidance issued from the Federal Reserve and to address a Federal Trade Commission inquiry.
The payments network said it will no longer require that consumers, at checkout, have an option to select a debit network. Instead, merchants now will have “the ability to select the network over which a debit transaction is processed or routed,” Visa said. “Merchants can continue to automatically ask, or prompt, a Visa cardholder to enter a PIN on in-person transactions, provided the cardholder can still use their card without a PIN if they prefer.”
The Board of Governors of the Federal Reserve earlier this month clarified that giving consumers the choice of debit network at the point of sale violates Regulation II’s network and routing requirements because it prevents a merchant from directing the route of a transaction.
The National Retail Federation welcomed Visa’s EMV debit card changes saying, “When U.S. Debit is chosen, the transaction goes over the retailer’s choice from up to a dozen competing networks that charge merchants less but provide more protection by allowing the use of a secret, secure personal identification number.”
The FTC was investigating the matter, but that investigation already has closed, according to a Nov. 22 letter from FTC, which cited Visa’s aforementioned changes.
The National Retail Federation called on Visa to work with merchants and terminal makers to make sure the EMV debit card routing changes do not require retailers to tweak their point-of-sale systems in such a way that “voids the certification of retailers’ EMV systems,” which could lead to liability issues for unsecured transactions.
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