On October 3, 2022, the Federal Reserve Board issued a final rule that amends Regulation II to 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. It also clarifies the requirement that debit card issuers ensure that at least two unaffiliated networks have been enabled to process a debit card transaction. The final rule will be effective July 1, 2023.
The final rule underscores that debit card issuers should enable at least two unaffiliated networks to process debit card transactions. It also includes certain changes that make it easier for debit card issuers to determine whether they are in compliance with the final rule. In addition, the updated rule standardizes and clarifies the use of certain terminology. Through the issuance of this amendment, the Board aims to encourage competition between networks and incentivize them to improve their fraud-prevention capabilities.
It is to be noted that the final rule does not modify requirements concerning interchange fees.
Read the FRB’s announcement here.
A copy of the Final Rule can be found here.