What Merchants Can Expect from Debit #EMV Transactions

As more debit cards are upgrade to EMV chips, it is important to understand merchants’ roles in the transaction process. 

Over a year after the first liability shift, EMV chip cards are quickly becoming more commonplace. Already, 70 percent of U.S. consumers have EMV chip cards in their wallets. That number is expected to continue rising, with all payment cards predicted to be upgraded by the end of 2017.  

For merchants, a key part of the EMV implementation process is choosing how they route transactions. Merchants have some level of flexibility in this area. They can choose either of two debit application identifiers (AIDs) to process transactions. 

Merchants can route debit transactions using either the U.S. common AID or the global AID. The U.S. common AID accesses the Visa and MasterCard networks, as well as a variety of other PIN-debit networks. The global AID, on the other hand, will route only to Visa or MasterCard. Merchants can use either AID, regardless of which cardholder verification methods they have in place. 

Depending on how their point-of-sale terminals are set up, individual merchants may vary on how they prompt cardholders to verify transactions. Verification methods may include:  

  • PIN entry
  • Signature verification
  • No cardholder verification method (CVM)

In a recent statement, Visa provided clarification that merchants automatically prompting for PIN entry must also provide a signature verification option or a no CVM opt out. At no point during a transaction should a cardholder be prompted to select a debit AID. 

With cardholders’ EMV debit transactions varying by merchant, financial institutions may receive questions on the various processes in place. To ensure they are equipped to field these questions, front-line staff should have a basic understanding of how merchants route transactions.