NACS, MAG Express Concern Over Three Debit Applications

Both groups advocate a single domestic debit application with all debit networks participating.

June 27, 2013

MINNEAPOLIS, MN and ALEXANDRIA, VA – The Merchant Advisory Group (MAG) has expressed its “deep concern” over recent news articles that create the impression that “all stakeholders are content with using three debit applications for routing U.S. debit transactions and accept the October 2015 date as a given.”

Both MAG and NACS oppose using three debit applications for U.S. debit and advocate for a single domestic debit application with all debit networks participating.

“A single application is much simpler to implement for merchants and would preserve merchants’ legal rights under Reg II,” said Mark Horwedel, CEO for MAG. “Issuers would preserve their ability to move seamlessly between networks without the need to reissue devices. Consumers would benefit from enhanced reliability by avoiding POS complexities associated with multiple debit applications. Regional networks would preserve their ability to compete.”

Horwedel also took issue with the October 2015 date as “completely unreasonable given the inability of the networks to resolve the debit issue.”

NACS supports MAG’s position.

“NACS is in full support The MAG’ position on this unworkable solution, currently on the table to accommodate debit routing under the EMV standard,” said Lyle Beckwith, NACS senior vice president of government relations. “This technical issue is tantamount to circumvention of the Durbin Amendment’s stipulation that merchants have the choice of networks through which to route debit card transactions, as it is unwieldy to implement and causes undue complexity in, what should be, a simple process.” 

Beckwith added that continued failure by the card brands to adopt a single standard “proves that EMV is more about preserving card business models than improving the security of the U.S. payment system. Further, this issue combined with the looming (and seemingly unchangeable) liability shift dates announced by the card brands force merchants to adopt a deeply flawed routing solution or face increased charge-backs which will raise prices to consumers.”

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