Jack Henry's EMV Fast Track Is Credit-Only as Debit Issues Linger

A new Jack Henry program can speed EMV-chip card migration for card issuers by up to a year — but only for credit cards, since ongoing legal issues hamper the use of EMV for debit cards.

The widespread adoption of EMV technology in the U.S. has been slowed by the need to adhere to the Durbin amendment's requirement for multiple routing options on debit cards. As the card brands and debit networks neared agreement on the handling of a common application identifier (AID) for EMV debit routing, a federal judge struck down the Fed's implementation of the Durbin rule, dialing back some of the industry's progress.

"We're going to hold off and see what settles around the debit issue," says John Postle, general manager of JHA Payment Processing Solutions (PPS), a Jack Henry division that's offering the expedited EMV implementation process for U.S. Visa chip card issuance.

"The issues on the debit side are about the 'common code' and the impact around Durbin and the recent court finding," he says.

On the credit side, Jack Henry's EMV program allows the company to fast-track Visa certification for issuers whose card programs have the same parameters as Jack Henry issuers that have already been certified by Visa.

"Everything about the EMV implementation from one issuer to the next would be identical," Postle says, adding the cost of EMV certification, as well as the time can be all but eliminated, leaving card ordering, distribution and marketing as the primary migration tasks.

Under other approaches, "it can take from six to 12 months to get Visa certified," Postle says.

For Coast Central Credit Union, a 60,000-member credit union that serves the central California coast, the Jack Henry program has been beneficial, says Debbie Spellenberg, card services supervisor for the credit union, which only offers Visa credit cards.

"It has been less difficult than we thought and it has also cost less than Jack Henry originally estimated," she says, adding Jack Henry has also aided in other parts of the migration such as card inventory. "There were always concerns about cost and monitoring how much card stock we have to make sure we don't run out. And they have helped us manage that."

While a fast track program for card network EMV certification is a good idea, there are still too many inhibiting factors in the short term, says Nick Holland, a senior analyst at Javelin Strategy & Research.

"I have been speaking to a lot of issuers and they don't know when to pull the trigger, in particular with the recent Durbin developments and the total lack of clarity related to EMV debit," Holland says. "The market seems very confused. The expedited migration is good, but only if the market is ready."

An EMV issuer program similar to Jack Henry's would work best if it were more holistic in terms of card types and networks, Holland says.

"In all reality, it looks like it's a little premature," Holland says, adding the final U.S. EMV migration may not happen until 2016 or 2017 despite the card networks setting an October 2015 deadline for most merchants. "The issuers know this is coming, but when do they make the transition?"

While Jack Henry's EMV fast track product is currently limited to Visa, it expects to expand to other networks, Postle says.

MasterCard, Discover, Visa and American Express did not return requests for comment by deadline.