An agreement has been announced today between First Data and MasterCard. The agreement would let the STAR® Network of First Data to participate in common US Debit EMV solution by MasterCard.
EMV is an acronym for Europay, MasterCard and Visa. It is a standard that authenticates credit and debit card payments. For better security, countries are migrating to EMV solution as payment transactions through Integrated Circuit (IC) cards, often known as Chip cards and IC enabled point of sale software meeting EMV specifications are secured.
The advantage of IC cards or Chip cards is that they have dynamic data instead of static data. Static data is stored in magnetic stripe, which has some vulnerability. Dynamic chip cards are safer.
Experts believe today’s agreement between MasterCard and First Data would not only pave way for cost-efficient EMV solution, but also precipitate the implementation of EMV functionality all across the United States.
If MasterCard and First Data work together, debit card issuers may find them at ease. They will get a slew of choices in recognizing and applying various network relationships to abide by the EMV specifications. Retail merchants and acquirers will be able to route transactions without having to reprogram the embedded system.
Barry McCarthy, the president of First Data Financial Services said, “First Data again demonstrates its leadership position in the advancement of EMV in the U.S. with STAR being one of the first debit networks to assist issuers, acquirers, and merchants with equal access to a shared EMV chip card technology, without restrictions on cardholder verification methods…”
Actually, lucidity and ease of use in EMV is the need of the hour because EMV adoption has been rapidly increasing. An announcement has been made very recently that NYCE network participants will avail Visa EMV debit. NYCE is in the authority of Debit Network Alliance and aims to integrate EMV fully before 2015.
An executive of Visa Inc called Bill Sheedy said, “NYCE’s participation in Visa’s common debit solution marks an important milestone in the industry’s efforts to adopt chip technology in the U.S.” He believes the uncertainty of enabling debit routing must be dealt with. This is where the agreement between MasterCard and First Data comes handy.
With initiatives like this EVM will hopefully be integrated across the entire US. This will be highly favorable for debit routing.