The path to chip-and-PIN debit cards for U.S. credit unions got wider this week with an agreement between Visa Inc. and First Data to share Visa's common debit solution technology for EMV adoption.
"The common debit solution will both support issuer choice and flexibility, allowing network changes without reissuing cards, and merchant and acquiring routing choices without costly host systems reprogramming. Minimal updates are required for all when new participants adopt the solution," Visa and First Data said in their joint announcement on Wednesday.
A liability shift coming in October 2015 is raising the stakes for card issuers, and CO-OP Financial Services, a participant in Atlanta-based First Data's widely used STAR Network, hailed the news.
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Many of CO-OP's clients are STAR participants and CO-OP supports STAR's licensing agreement with Visa, CO-OP said, adding that it, too, is working to provide similar functionality in the marketplace.
The major card brands are moving toward adopting the EMV model, which features an embedded chip that generates a one-time code for each transaction. Widely used internationally, the chips are considered vastly harder to replicate for fraud purposes than the traditional magnetic stripe still in use in the United States.
The license agreement will help enable the development of regulation-compliant debit EMV solutions, the Visa-First Data statement said, that will facilitate different types of debit transactions, including PIN, PIN-less and signature cardholder verification methods.
Adding First Data's STAR Network also will give Visa debit issuers a choice among several competing network options for their EMV chip debit cards, said the joint statement from Visa and First Data. The STAR network comprises more than two million retail point-of-sale and ATM locations.
CO-OP said in its statement Thursday, "Like STAR, CO-OP is among the leading PIN debit networks in the Debit Network Alliance working to provide a structure for the common deployment and implementation of the debit EMV standard. One of the ways this can be accomplished is through agreements with other networks, such as the Visa-STAR agreement."
The Debit Network Alliance was created late last year to work toward a common debit chip solution to maintain an open, competitive debit network marketplace.
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