Fed Finalizes Routing Choice Requirements For Online Payments

Last week, the Federal Reserve Board finalized updates to the Board’s rule concerning debit card transactions.

Pursuant to statute, the updates specify that debit card issuers should enable at least two payment card networks to process all debit card transactions, including “card-not-present” transactions, such as online payments.

By law, the Board is required to make rules ensuring that debit card issuers give retailers the opportunity to choose between at least two unaffiliated networks when routing debit card transactions.

When the Board initially issued the rule in July 2011, the market had not developed solutions to broadly support multiple networks for card-not-present debit card transactions.

Since that time, technology has evolved to address these barriers. However, some debit card issuers have not yet enabled at least two unaffiliated networks for merchants to choose between when routing such transactions.

This issue has become increasingly pronounced because of continued growth in online payments.

EMA is a member of the Merchants Payments Coalition (MPC), which represents retailers, supermarkets, restaurants, drug stores, convenience stores, gas stations, online merchants, and other businesses focused on reforming the U.S. payments system to make it more transparent and competitive.

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