PIN Bypass in the U.S. Market

Publication Date: November 2019

The U.S. is a “chip and choice market,” with both signature-preferring and PIN-preferring cards and profiles.  For PIN-preferring cards, some stakeholders may decide to process transactions without PIN entry, using PIN Entry Bypass or other options described in this white paper.

This U.S. Payments Forum white paper describes PIN Entry Bypass, as defined in Book 4 of the EMV specification.  PIN Entry Bypass can be used to allow cardholders to opt out of PIN entry, with a transaction indicator informing the issuer that the PIN was bypassed on a PIN-preferring card.  The white paper discusses the transaction flow and the impact on issuers, merchants and cardholders.

The white paper also discussions alternative processes that may be deployed which also allow selection of cardholder verification methods – merchant cardholder verification selection and issuer preference for and cardholder selection of cardholder verification method.  Merchant and issuer considerations are described for these alternative approaches.

The November 2019 update of the white paper provides clarification of PIN Entry Bypass implementation for contactless transactions and for CVM processing.

While considerations for all constituents have been outlined in this paper, it is highly recommended that issuers, acquirers and processors seek guidance from the payment networks with whom they connect, and that merchants speak to their merchant service provider before planning implementation.

Please note: The information and materials available on this web page (“Information”) is provided solely for convenience and does not constitute legal or technical advice. All representations or warranties, express or implied, are expressly disclaimed, including without limitation, implied warranties of merchantability or fitness for a particular purpose and all warranties regarding accuracy, completeness, adequacy, results, title and non-infringement. All Information is limited to the scenarios, stakeholders and other matters specified, and should be considered in light of applicable laws, regulations, industry rules and requirements, facts, circumstances and other relevant factors. Use of or reliance on the Information is at the user’s sole risk, and users are strongly encouraged to consult with their respective payment networks, acquirers, processors, vendors and appropriately qualified technical and legal experts prior to all implementation decisions.

Please note that, on November 2, 2016, staff of the Board of Governors of the Federal Reserve System (the “Board”) released a FAQ relating to Section 235.7(b) of Federal Reserve Regulation II (promulgated by the Board pursuant to the Durbin Amendment to the Dodd-Frank Act), noting that although the FAQ is not an official Board interpretation, “[a] payment card network inhibits a merchant’s ability to route electronic debit card transactions if it, by network rules, standards, specifications, contractual agreements, or otherwise, requires the merchant to allow the cardholder to make the choice of EMV chip application on a debit card, where one application routes only to a single network.” None of the Information should be interpreted or construed to require or promote the establishment of any solution, practice, configuration, rule, requirement or specification inconsistent with applicable legal requirements, including Federal Reserve Regulation II, any of which may change over time. The U.S. Payments Forum assumes no responsibility to support, maintain or update the Information, regardless of any such change.

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