Visa Adjusts Policies On Debit Routing

The company said that, with the chip cards, routing and processing of debit transactions are made possible across two payment application identifiers (AID) that are contained on the chip. The AIDs are known as the U.S. Common Debit AID and the Visa Debit AID. The first, said Visa, supports the more than a dozen domestic debit networks that exist alongside, and as alternatives to, Visa Debit. The merchants can then select which networks will process and route their transactions in EMV chip card readers.

Visa now is stating that merchants can use the Common Debit AID to route the debit transactions and do not have to ask cardholders to choose AIDs or networks for that debit processing. Merchants also are able to ask holders to enter PINs, though they must also allow transactions to be processed that do not use a PIN.

As has been widely reported, EMV transactions are more secure than “swiped” transactions, as they require a PIN to complete a purchase.

Separately, the National Retail Federation said that it applauded Visa’s decision not to explicitly steer debit transactions across its own processing network.

“We’re glad to see Visa has recognized that they have crossed the line,” said NRF Senior Vice President and General Counsel Mallory Duncan. “It’s a shame it took two federal agencies to make that clear. Now, the real question is whether Visa will do the right thing by cleaning up the mess they’ve created.”

The federation noted that the U.S. Debit option allows for more secure transactions while charging merchants less than the Visa network.

The Fed said earlier this month that Visa’s practices transgressed 2010 debit card payments laws, which stated that retailers should be allowed to choose from several networks unaffiliated with Visa to process debits.