Bowing to EMV’s Urgency, Accel Adopts MasterCard’s Common Debit Solution

Fiserv Inc. on Wednesday said its Accel debit network will license a critical EMV solution from MasterCard Inc. The move follows a decision by First Data Corp.’s Star network late last month to adopt similar technology from Visa Inc. and indicates the national-brand networks may be winning over the regional systems, many of which have been pushing their own solution.

Morris Plains, N.J.-based Accel is the first network to adopt MasterCard’s so-called common AID, or application identifier, for debit card transactions using the Europay-MasterCard-Visa standard since the solution became available 14 months ago. But it and Star likely won’t be the last electronic funds transfer systems to sign up with either MasterCard or Visa, experts say. “I would expect there to be more,” says Jane Cloninger, a director at San Francisco-based payments consultancy Edgar Dunn & Co. “Looming deadlines, breaches, and the difficulty of building a solution de novo are forces motivating the networks short-term to get to market quickly.”

Meanwhile, corralling Accel is “a win for MasterCard,” Cloninger says.

David Keenan, general manager for network solutions at Brookfield, Wis.-based Fiserv, won’t go into details about Accel’s deal with MasterCard, calling them proprietary. But he confirms the processor was looking for a solution for Accel that would get debit EMV to market as quickly as possible. Card issuers and merchants have until October 2015 to be equipped to handle EMV transactions, with the party not so equipped becoming liable for counterfeit fraud losses. Both Visa and MasterCard re-affirmed this deadline in the wake of massive publicity about card-data breaches during and after the holidays. EMV transactions are widely viewed as safer than magnetic-stripe payments.

That imperative, Keenan tells Digital Transactions News, lent urgency to Fiserv’s plans for Accel, which last April shortened its name from the Accel-Exchange brand it had used for decades. Relying on MasterCard’s debit EMV solution, Keenan says, offers “soup to nuts, a simple, streamlined way to implement EMV. The clock is ticking.”

Even using MasterCard’s AID solution, he says, it will take at least six months for Accel to fully implement debit EMV.

The need for such a solution arises from a requirement in the Federal Reserve’s rule implementing the Durbin Amendment to the 2010 Dodd Frank Act that merchants have a choice of at least two unrelated networks on which to process each debit card transaction. While this rule is workable for mag-stripe cards, EMV was not designed for such network choice.

In response, Visa, MasterCard, and a group of 10 regional EFT networks proposed fixes last year that would enable processors to route EMV transactions while allowing at least two network brands to co-exist on the chip, relying on a common AID. With Accel’s adoption of MasterCard’s solution, for example, the brands will be Accel, Maestro, and MasterCard.

Until recently, the 10 networks opposed the national-brand networks’ solutions, arguing they didn’t offer equal governance. That solid wall of opposition began to crumble when Star, one of the 10, broke ranks last month to license Visa’s solution.

Fiserv’s move with Accel, though, stands apart from Star’s decision. Fiserv was never a member of the Debit Network Alliance, which formed in December and includes the 10 regional networks that developed their own common-AID proposal. Indeed, Keenan says he could not see the logic in the regionals’ solution. “Frankly, I just never saw that the methods proposed by the DNA were consistent with a simple, streamlined way to implement EMV,” he says.

Paul Tomasofsky, executive director of the DNA as well as of the Secure Remote Payments Council (of which Accel is a member), says the Accel-MasterCard deal is a sign that the DNA's work is starting to bear fruit for debit EMV. “That's progress,” he tells Digital Transactions News. “Even if you're not a member of the DNA, you can benefit from the work that's being done there.”

Still, the industry needs to work toward an open standard for a debit AID, he warns. “That's what we need to be talking about, a standard governed in an open manner so there's equal access to the technology,” he says.

Meanwhile, a court ruling last summer has cast a pall of uncertainty over debit routing. The federal court decision threw out the Fed’s interpretation of the Durbin routing rule, arguing the rule actually calls for debit transactions to allow merchants to choose among at least two unrelated networks for each authentication method, PIN or signature. An appeals court heard arguments over the lower-court decision late last year.

Keenan, though, says he’s not concerned. “We have future-proofed this [MasterCard] solution with each scenario we can think of coming down the pike,” he says.