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Industry Applauds Visa Screen Changes

Visa is revising its rules on a confusing checkout screen for EMV debit card users found at some groceries as a result of the Federal Trade Commission (FTC) investigation into concerns that the screens inhibited the routing choice and competition guaranteed by federal law. Food Marketing Institute (FMI) has registered a complaint with the FTC and the Federal Reserve Board that the screen was in violation of existing competition law and implementing regulations.

The screen prompted customers to select U.S. debit or Visa debit, which could limit their ability to get cashback or enter their PIN (personal identification number). To avoid further enforcement action, Visa agreed to amend its Core Selection of Payment System rule to clarify that it doesn't apply to U.S. debit transactions. The FTC investigation found that limited network availability on separate EMV applications inhibits merchant routing choice guaranteed by law. Any checkout screen prompt, such as the U.S./Visa debit prompt, or a debit and credit prompt where the selection of credit can only be transacted over the Visa network, is a violation of existing regulations.

While change is coming, customers will continue to see the screen in the short term.

In response to the move, Leslie Sarasin, president and CEO of Arlington, Va.-based FMI noted, “In its role as the Voice of Food Retail and on behalf of the nation's food retailers, FMI is pleased to see Visa change its rules on the confusing EMV debit screens at checkout.”

She aldded that “[w]hile Visa’s actions to change its rules to comply with the law are a significant step in the right direction, it will take some time for grocers who have the confusing screens to replace them. Therefore, FMI requests that Visa prevent additional exposure to liability while merchants revise their systems to ensure customers have the safest, most secure and most efficient transactions.”

The Retail Industry Leaders Association (RILA) also weighed in on the issue. “RILA applauds the FTC and Federal Reserve for moving to quickly address this latest attempt by Visa to prevent competition in the payments market. Fish instinctively swim, the sun always rises in the East, and without watchful regulators, Visa will always use its market power to act in anticompetitive ways,” said Austen Jensen, VP of government relations at RILA, also based in Arlington.

Liz Garner, VP at the Minneapolis-based Merchant Advisory Group, noted that “[t]his highlights the importance of Regulation II for keeping bad actors in check, and is a huge win for ensuring debit network competition and innovation for existing and emerging payments.” The group will work with both FTC and the Federal Reserve Board to “ensure a smooth transition as merchants and acquirers go through the process of altering EMV deployments in light of the recent rule changes,” she added.


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