Ironically, Online PIN Debit has existed since day one, and is by most standards, considered ten times more secure than it's "Offline Signature Debit" counterpart. The exponentially more secure (and hence, the significantly lower interchange fees) which iPINDebit has to offer, have, until now, not been readily available "online."
Acculynk offers a game-changing Internet PIN Debit platform endorsed by MasterCard, Discover/PULSE, and most of the EFT Networks. To learn more, send an email to jfrank@ePINDebit.com
By Will Hernandez
Internet PIN-debit payment technology is slowly, but steadily, gaining traction in the marketplace as several companies have introduced products intended to bring more security to online transactions.
Electronic funds transfer networks are supporting the technology with the hope their products will help them capture transactions otherwise lost to the likes of PayPal Inc. and other alternative payment methods that use the automated clearinghouse for settlement.
Merchants should be eager to accept PIN-debit transactions online to reduce transaction costs because of lower interchange rates and fewer charge-backs, say executives from companies offering such products.
At least one ISO believes Internet PIN-debit already has helped it gain business it would have lost to a competitor.
Indeed, Internet PIN-debit’s success likely will hinge on widespread consumer and merchant adoption. The determining factor for consumers might be whether they are comfortable entering their PINs in an environment other than at the point-of-sale or at an ATM.
The ISO Advantage
In April, Acculynk launched an ISO reseller program to enable companies to sell signature- and Internet PIN-debit processing as a package and to pursue the card-not-present and Internet merchant markets strategically, says Nandan Sheth, president of Atlanta-based Acculynk.
The company’s expanded product, PaySecure Plus, includes credit and debit card processing and Internet PIN-debit transaction processing. Elavon Inc., an Atlanta-based processor, is providing card-processing services for Acculynk, says Sheth.
Dallas-based JetPay LLC is one of the few merchant services providers to publicly promote itself as a PaySecure supporter.
JetPay has offered PaySecure to merchants since September and quickly discovered the product gives the company an advantage in the marketplace, claims company Chairman Trent Voigt.
Internet PIN-debit’s allure forced one merchant to rethink a commitment it was about to make with a bigger transaction processor, Voigt says. JetPay also serves as a processor.
Potential new clients are intrigued with Internet PIN-debit’s potential because it helps merchants tap into consumers who have no other way to pay online using their debit cards, Voigt says. Prospective clients see the opportunity and then want to understand it better as they evaluate potential partnerships, he adds.
PaySecure has enabled JetPay to go back to merchants it previously failed to secure as processing partners.
“Some accounts we didn’t win because we weren’t the bigger company,” Voigt says. “Now we can go back to those accounts, ask them if they want to do [Internet] PIN-debit and process those transactions.”
The idea then is to capture that client’s entire business once their contract expires with its existing processor, Voigt says.
The Next Thing
JetPay believes its has an advantage in the marketplace because it offers what it calls “least-cost routing.” The transaction amount will determine whether the merchant online checkout process will present PaySecure as an option. “Sometimes it’s cheaper to process the transaction” as signature-debit, Voigt says.
Internet PIN-debit will not sell itself to merchants despite its potential to reduce cost, Voigt warns. The product requires some education on the ISO’s part. “[Merchants] want to believe in it,” he adds.
It also helps that merchants “are always asking what’s the next thing we need for alternative payments, and how do we save money?” he adds.
JetPay merchants using products such as Bill Me Later fail to see many approvals because many users of the service are not credit-worthy. “We figured out the people who didn’t have credit cards also don’t have credit-worthiness,” Voigt says.
Those consumers then turn to a debit card to make high-ticket purchases such as airline tickets. JetPay’s partner airlines already have experienced steady success with PaySecure. Voigt believes that is because airline ticket purchases are planned in advance, allowing consumers to save money for a trip. “That’s different than buying a TV, which is really an impulse buy,” he says.
Consumers who are fiscally responsible with little to no debt also will find Internet PIN-debit appealing, Voigt contends.
“You have a chunk of consumers that believe that you shouldn’t have debt” based on social and economic beliefs, he says. “There are consumers making six figures who don’t have credit cards because they choose not to have them.”
Editor's Note: Online PIN Debit has existed since Day One.
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