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| iPINdebit.com, ePINdebit.com, e-PINdebit.com and PINdebit.mobi |
Here are some excerpts from an article written by Will Hernandez for American Banker where he takes a closer look at Internet PIN Debit. To read the entire article, click here.
Future of Web PIN Payments Still Rests with Consumers
By Will Hernandez, American Banker
More electronic funds transfer networks are supporting Internet PIN payments to capture transactions otherwise lost to alternative payment methods that use the automated clearing house system for settlement.
Merchants should be eager to accept PIN debit transactions online to reduce transaction costs, thanks to lower interchange rates and decreased chargeback risk, executives from companies offering these products said. At least one independent sales organization said it believes Internet PIN debit already has helped it gain business it would have lost to competitors. However, the determining factor for consumers might rest with their comfort in entering PIN codes in an environment other than at the point of sale or an automated teller machine.
Acculynk Inc.'s PaySecure service has sprinted to the front of the pack in the race to determine which product gains universal acceptance among consumers and merchants. Nine EFT networks support PaySecure — Accel/Exchange, Alaska Option, Credit Union 24, Maestro, NetWorks, NYCE, Pulse and Shazam. A thousand merchants accept PaySecure transactions.  |
| MasterCard/Maestro Goes with Acculynk |
RATES VARY
Card-not-present signature debit rates set by Visa Inc. and MasterCard Inc. typically range from 1.64% to 2.2% of the sale, depending on the type of transaction, according to Acculynk. The final price to the merchant for PaySecure typically is 20% to 40% lower than what they would pay for card-not-present signature debit, Acculynk has said in the past.
The acquiring bank then passes the expense along to the retailer as part of the discount rate, which also covers costs for processing and other services, including those provided by the supplier of the PIN debit payment service.
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, said Nandan Sheth, Acculynk's president.
The Atlanta company's expanded product, PaySecure Plus, includes credit and debit card processing and Internet PIN debit transaction processing.
Elavon Inc., an Atlanta processor owned by U.S. Bancorp, is providing card processing services for Acculynk, Sheth said.
JetPay LLC of Dallas 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 determined that the product gives the company an advantage in the marketplace, claims its chairman, Trent Voigt. JetPay mostly deals with Internet-based businesses.
Internet PIN debit's allure forced one merchant to rethink a commitment it was about to make with a bigger transaction processor that did not offer PaySecure, Voigt said. JetPay also is a processor.
"Some accounts we didn't win because we weren't the bigger company," Voigt said. "Now we can go back to those accounts, ask them if they want to do [Internet] PIN debit and process those transactions."
EFT network executives seem to be comfortable with PaySecure, and some networks have been testing the product for more than a year.
Last year, Fiserv Inc.'s Accel/Exchange became the first to roll out the service.
"We like this model because it doesn't cut out the bank," said Michael Kelly, the general manager of Accel/Exchange. "There are a couple of other networks that have aligned with PayPal, but we don't think that is the right model."
In April 2009, Javelin conducted a survey that found 80% of participants would use PaySecure if a trusted merchant presented it as a checkout option. Javelin surveyed 500 signature debit card users who had made online purchases in the previous year. Survey participants used PaySecure for a mock online purchase and then answered questions about their experience using the product.
One aspect Internet PIN debit technology has in its favor is that consumers already are familiar with the transaction process, said Dan Kramer, Shazam's senior vice president of marketing and merchant services.
The Atlanta company's expanded product, PaySecure Plus, includes credit and debit card processing and Internet PIN debit transaction processing.
JetPay LLC of Dallas 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 determined that the product gives the company an advantage in the marketplace, claims its chairman, Trent Voigt. JetPay mostly deals with Internet-based businesses.
Internet PIN debit's allure forced one merchant to rethink a commitment it was about to make with a bigger transaction processor that did not offer PaySecure, Voigt said. JetPay also is a processor.
"Some accounts we didn't win because we weren't the bigger company," Voigt said. "Now we can go back to those accounts, ask them if they want to do [Internet] PIN debit and process those transactions."
EFT network executives seem to be comfortable with PaySecure, and some networks have been testing the product for more than a year.
Last year, Fiserv Inc.'s Accel/Exchange became the first to roll out the service.
"We like this model because it doesn't cut out the bank," said Michael Kelly, the general manager of Accel/Exchange. "There are a couple of other networks that have aligned with PayPal, but we don't think that is the right model."
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| Signature Debit might have higher fraud, but it also makes more money for the banks so they push it over the more secure PIN Debit. Many feel that's about to change. |
One aspect Internet PIN debit technology has in its favor is that consumers already are familiar with the transaction process, said Dan Kramer, Shazam's senior vice president of marketing and merchant services.
