EMV, the Durbin Amendment, and Network Choice

EMV (Europay, MasterCard, Visa) is the new chip card authentication standard set to be introduced into the U.S. starting in 2013.

The Durbin Amendment is a federal law with several provisions regulating the debit card industry in the U.S. One of the provisions mandates that merchant acquirers provide a choice of networks to merchants for routing debit card transactions. The law requires that all debit cards support at least two unaffliated networks.

As of this writing, EMV does not currently allow network choice, and so cannot comply with the federal law. The EMV specification uses an Application Identifier (AID), which is a string of characters that identifies the network and the specific type of card. This AID is currently proprietary to the card brands and cannot route to different networks.

Several solutions to this problem have been offered:

1. MasterCard has proposed opening their proprietary Maestro AID to the industry. This solution would reside on the EMV card's chip and would allow a merchant processor to route transactions to a merchant's preferred network.

2. Various EFT networks have proposed the creation of a common AID that would apply to any network and allow routing to a merchant's preferred network according to a table of Bank Identification Numbers (BIN) that would identify which networks the card issuer belongs to and which networks the merchant prefers.