PaySecure Internet PIN Debit on Track with U.S. Financial Institutions

Significant issuer benefits and nine EFT network partnerships spur bank and credit union adoption

“Debit card usage is on the rise, both at the POS and online. Issuers want to leverage this growth economically, and that’s where PaySecure comes in,” said Ulrike Guigui, Executive Vice President of Issuer Development, Acculynk.

Atlanta, GA (PRWEB) October 13, 2010

In this uncertain regulatory climate, U.S. issuers are under pressure to not only retain current customers, but to expand their product portfolio with revenue-generating services that bring value to consumers (BAI RDC Booth # 309).

Last year, technology provider Acculynk introduced the first software-only service for PIN debit payments on the Internet, PaySecure®, providing consumers the choice to authenticate their online transaction with their bank-issued PIN using PaySecure’s patented, graphical PIN-pad.

Since its introduction, PaySecure has grown to encompass partnerships with nine U.S. EFT networks that are making PaySecure available across their issuer base. In a time of increasing concern over the expenses associated with supporting debit cards, PaySecure’s value proposition of reduced fraud and charge-backs, simple enablement, and increased transaction volume from security-conscious consumers, and those that prefer PIN debit or have PIN-only debit cards, has led to the adoption of PaySecure by thousands of issuers.

“Debit card usage is on the rise, both at the POS and online. Issuers want to leverage this growth economically, and that’s where PaySecure comes in,” said Ulrike Guigui, Executive Vice President of Issuer Development, Acculynk. “PaySecure is a true, bank-sponsored alternative that is used with a consumer’s existing debit card that the bank or credit union has already issued, so there are no new cards, passwords or tokens that the issuer needs to provide. To offer the PaySecure option to cardholders, an issuer simply provides the bank identification numbers (BINs) of the debit cards they wish to enable for PaySecure.”

To date, ACCEL/Exchange, Alaska Option, Credit Union 24, Jeanie, MasterCard, NetWorks, NYCE, PULSE and SHAZAM have partnered with Acculynk to provide PaySecure to their issuers. Over 6,000 financial institutions across 5 EFT networks have been enabled for PaySecure, with that number expected to double in the next 6 months.

“We immediately saw the value to our issuing base with PaySecure,” said Michael Kelly, General Manager of ACCEL/Exchange. “It offers a higher level of security, it leads to better margins for issuers and it costs nothing for an issuer to participate. Issuers can give cardholders another choice of how they pay with their debit card while saving money on fraud, without any technology changes.”

Acculynk is building on its PaySecure Internet PIN debit product to provide more features and extensions. Plans are underway to enable a consumer opt-in overdraft capability on the PIN-pad, and to leverage the PaySecure PIN-pad for online banking authentication. Stop by Acculynk’s booth, #309, at the BAI Retail Delivery Conference to see a demonstration of PaySecure and learn more about this bank-sponsored payment method.

About Acculynk
Acculynk secures online transactions with a suite of software-only services backed by a patented authentication and encryption framework provide greater security for issuers, EFT networks, merchants and payment processors. Acculynk has introduced the first software-only service for Internet PIN debit payments, PaySecure®, which utilizes a graphical PIN-pad for the secure entry of a consumer’s PIN. PaySecure is currently enabled on over 1,000 merchant websites. Acculynk has partnerships with 9 EFT networks to process PaySecure transactions and with six leading payment processors to distribute the product. Visithttp://www.acculynk.com.

Contact:
Danielle Duclos
Acculynk
(678) 894-7013
press(at)acculynk(dot)com

# # #

MasterCard Teams with Acculynk to Give Issuers Option to Use PaySecure for Enhanced Debit E-Commerce Authentication

MasterCard Teams with Acculynk to Provide Internet PIN Debit to U.S. Financial Institutions that Issue Debit MasterCards'

PaySecure provides consumers the option to use PIN debit on the Internet with a secure, software-only service that requires no enrollment or redirection

ATLANTA--(BUSINESS WIRE)--Acculynk announced today an agreement with MasterCard Worldwide (NYSE: MA) to provide PaySecure^®, Acculynk’s Internet PIN debit solution, to U.S. financial institutions that issue Debit MasterCard cards.

“PaySecure offers U.S. consumers the option to use PIN debit on the Internet with a secure, software-only service that requires no enrollment or redirection from the merchant checkout”

PaySecure is an optional cardholder verification method for PIN-based e-commerce transactions. In keeping with MasterCard’s commitment to innovation in debit, the agreement provides participating financial institutions an opportunity to expand and enhance their e-commerce authentication methods with PaySecure via the MasterCard Worldwide Network.

“PaySecure offers U.S. consumers the option to use PIN debit on the Internet with a secure, software-only service that requires no enrollment or redirection from the merchant checkout,” said Ashish Bahl, CEO of Acculynk. “Our agreement with MasterCard allows us to offer this option to a selection of financial institutions that offer PIN entry on Debit MasterCard cards.”

“In order to provide our customers with additional choice and flexibility for securing online purchases, MasterCard customers can now opt to use the PaySecure Solution for their debit cardholders,” said Patricia Preston, Group Head, Debit Product Management, MasterCard. “With PaySecure, we are offering our customers another tool intended to enhance security for online payments.”

PaySecure appears as a payment option at an enrolled online merchant’s checkout screen when the consumer’s debit card is issued by a financial institution that has enrolled its cards in the PaySecure service. Rather than typing in their PIN, consumers enter their PIN using their mouse on Acculynk’s patented, graphical PIN-pad to complete the transaction.

About Acculynk

Acculynk secures online transactions with a suite of software-only services backed by a patented authentication and encryption framework. Acculynk’s services provide greater security and return on investment for issuers, EFT networks and merchants. Acculynk is the first company to introduce a software-only service for Internet PIN debit payments, PaySecure^®. PaySecure is enabled on over 1,000 merchant websites, and Acculynk has partnerships with 9 EFT networks to process PaySecure transactions. For more information, visit http://www.acculynk.com.

Contacts

Acculynk
Danielle Duclos, 678-894-7013
press@acculynk.com
or
MasterCard
Joanne Trout, 914-249-6848
joanne_trout@mastercard.com

Permalink: http://www.businesswire.com/news/home/20100728005857/en/MasterCard-Teams-Acculynk-Give-Issuers-Option-PaySecure

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• Acculynk Announces Agreement With the Jeanie Network for Internet PIN Debit (pindebit.blogspot.com)
• Acculynk and EFT Networks Form Internet PIN Debit Advisory Council (eon.businesswire.com)
• PULSE Introduces PIN Debit for E-commerce Transactions (pindebit.blogspot.com)
• MasterCard Teams with Acculynk to Give Issuers Option to Use PaySecure for Enhanced Debit E-Commerce Authentication (eon.businesswire.com)

Read more: http://pindebit.blogspot.com/2010/07/mastercard-teams-with-acculynk-to.html#ixzz11nxanG5M

TCF Lawsuit is "Nonsense" Says Way Too High

Image via Wikipedia

TCF’s Suit Is ‘Nonsense,” Anti-Interchange Crusader Mitch Goldstone Says
(Digital Transactions)

From Way Too High

October 14, 2010

(October 14, 2010) TCF National Bank’s federal lawsuit against the controls on debit card interchange contained in the Dodd-Frank financial reform law draws scant sympathy from retailers who have been battling against card interchange, including a merchant and entrepreneur who has been leading a crusade against the pricing mechanism for years. “It’s nonsense,” says Mitch Goldstone, president and chief executive of ScanMyPhotos.com, Irvine, Calif. “It’s just another distraction.”  Goldstone argues the suit, which names the Federal Reserve as defendant and claims that the law’s provision for the Fed to control debit card interchange is unconstitutional, represents an effort by banks and the card networks to preserve status-quo interchange pricing for as long as possible. “It’s just a big game to them,” he says. “They’re just trying to run out the clock. Every day Visa and the banks get away without addressing interchange, they make another $120 million.” TCF filed its suit on Tuesday (Digital Transactions News, Oct. 12),

Goldstone’s estimate of the daily tab for interchange includes both credit and debit card fees, he says. Debit card interchange alone is estimated to represent about $15 billion in annual income for financial institutions. TCF, which is a prominent debit card issuer but has no credit card portfolio, estimates Dodd-Frank will cut its annual interchange income from $102 million to $20 million. While Visa and MasterCard set interchange rates, interchange income flows to card-issuing banks. It is paid by merchant acquirers, which then pass the cost on to merchants as part of the discount fee merchants pay on each transaction.

READ ARTICLE TCF’s Suit Is ‘Nonsense,” Anti-Interchange Crusader Says

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• Durbin Statement on TCF's Court Challenge of Interchange Law (pindebit.blogspot.com)
• TCF Bank Files Lawsuit Claiming Durbin Amendment is Unconstitutional (pindebit.blogspot.com)
• NRF Welcomes Justice Department Settlement Ending Visa and MasterCard Practice of Blocking Discounts to Retail Customers (pindebit.blogspot.com)
• Durbin Interchange Amendment's Exclusivity Prohibition will Gore Network Fees (pindebit.blogspot.com)
• Signature Debit Not Going Away Soon, says Auriemma Consulting Group (pindebit.blogspot.com)
• The Green Sheet: Debit surcharges in California endangered (pindebit.blogspot.com)
• NRF Urges Regulators to Treat Debit Cards Same as Checks (pindebit.blogspot.com)
• Federal Reserve Reaching Out to Credit Unions on Debit Interchange Rule (pindebit.blogspot.com)
• Downplaying Durbin Interchange Amendment won't Lessen its Impact (pindebit.blogspot.com)
• Payments Industry News Roundup for August 2010 (pindebit.blogspot.com)

Durbin Response to TCF's Lawsuit Challenging Constitutionality of Interchange Law

Durbin Statement on TCF's Court Challenge of Interchange Law

WASHINGTON, D.C.—(ENEWSPF)—October 12, 2010.  Assistant Senate Majority Leader Dick Durbin (D-IL) released the following statement today after Minnesota-based TCF National Bank filed a lawsuit challenging the constitutionality of a Durbin-authored law regarding interchange fees. The bipartisan language passed as part of the Wall Street reform act, requires the Federal Reserve to determine if the current interchange fee structure is both “reasonable and proportional” to the real cost of processing a debit card transaction and allows small businesses to offer discounts to consumers when they use cash, checks or debit cards.

“TCF’s complaint not only fundamentally misunderstands the law regarding interchange fees, but it also ignores the facts,” Durbin said. “The law in no way addresses the fees TCF, or any other bank, can charge and it does not set interchange rates. Our language simply ensures that debit interchange fees charged to retailers by the card networks – not the banks -- are ‘reasonable and proportional’ to the cost of processing transactions and provides competition in an area of the market where there’s none.

Congress approved this language by a wide bipartisan margin in reaction to the frustrations of millions of merchants and consumers who were getting nickled and dimed by the anticompetitive interchange system set up by big banks and credit card companies – including TCF. I look forward to this provision’s day in court and am confident that our language will be found to be fair and Constitutional.”

The Durbin amendment was passed by the Senate 64-33 in May of this year during the Senate’s consideration of the Wall Street reform bill. The amendment was agreed to after Congress held six hearings on the issue of interchange fees and their effect on consumers. A modified version of the Durbin amendment was later agreed to by House and Senate negotiators and included in the final bill.

Last week, the Department of Justice (DOJ) concluded a multiple year investigation into the issuance of interchange fees by credit card giants Visa and MasterCard and concluded that the rules surrounding interchange fees exclude competition and are unfair to consumers and merchants alike. DOJ, Visa and MasterCard reached a settlement that would require the two companies to allow merchants to offer discounts, incentives, and information to consumers to encourage the use of payment methods that are less costly. Durbin’s statement on the settlement can be found here: http://durbin.senate.gov/showRelease.cfm?releaseId=328137

Interchange fees are supposedly charged by Visa and MasterCard in order to cover the cost of processing a credit or debit card transaction. These fees continue to rise even though processing costs have decreased.  Nearly $50 billion in interchange fees were charged by credit and debit card networks in 2008 – coming out of the bottom lines of small businesses, charities and government balance sheets. Of these fees, 80 percent went to just ten large banks.

A summary of the Durbin interchange law is below:

Summary of the Durbin Interchange Amendment to the Wall Street Reform Act

·         The Durbin amendment would bring reasonable regulation to the $20 billion per year debit interchange fee system.  Interchange fees are received by the card-issuing bank in a debit card transaction.  However, Visa and MasterCard, which control 80% of the debit market, set the debit interchange fee rates that apply to all banks within their networks.  Every bank gets the same interchange fee rate, regardless of how efficiently a bank conducts debit transactions.  Visa and MasterCard do not allow banks to compete with one another or negotiate with merchants over interchange rates, and there is no constraint on Visa and MasterCard’s ability to fix the rates at unreasonable levels.  This system is effectively an unregulated $20 billion per year transfer of wealth from merchants and their customers to card-issuing banks.

·         The amendment will require that for transactions involving debit cards issued by banks with assets over $10 billion, any interchange fee charged on the transaction must be reasonable and proportional to the cost incurred in processing the transaction. Visa and MasterCard currently charge debit interchange fees of around 1-2% of the transaction amount.  These fees are far higher than the actual cost of processing debit transactions, and they mean that small businesses and merchants always get shortchanged when they accept a debit card for a sale.

·         The amendment will permit card-issuing banks to receive debit interchange fee adjustments to cover reasonably necessary fraud prevention costs.  However, as opposed to the current interchange system where banks receive a guaranteed level of interchange revenue no matter how effectively they deal with fraud, the amendment will require banks to demonstrate that they have met fraud-prevention standards and taken effective steps to reduce fraud in order to receive an issuer-specific interchange adjustment that will cover their necessary costs.

·         The amendment exempts government-administered debit cards and reloadable prepaid cards from debit interchange regulation so long as abusive cardholder fees are not charged.  The amendment would rescind this exemption for government-administered cards and reloadable prepaid cards if consumers using these cards are charged overdraft fees or fees for their first monthly ATM withdrawal by the card-issuing banks.

·         The amendment allows merchants to offer customers discounts for use of cash, checks and debit cards, and to set a $10 minimum for credit card transactions, without penalty from card networks.   These provisions will enable small businesses to bring their interchange costs under control and to pass savings on to consumers in the form of discounts.

·         The amendment prevents card networks from requiring that their debit cards be transacted exclusively on one debit network.  There are a number of PIN debit networks that merchants can use to conduct PIN debit transactions, and until recently most PIN debit cards were able to be used on multiple PIN networks.  This fostered price competition between the PIN networks.  Recently, however, price competition has diminished and PIN debit fees have gone up because large networks like Visa have increasingly required banks to sign exclusive agreements under which they become the sole PIN network whose logo appears on the banks’ cards.   The amendment would enhance competition by directing the Fed to issue regulations providing that a card network cannot limit a debit card to only be allowed to run on one exclusive network.

·         Nothing in the amendment would enable discrimination against debit or credit cards on the basis of the bank that issued the card.

Source: durbin.senate.gov

Related articles

• Durbin Statement on TCF's Court Challenge of Interchange Law (pindebit.blogspot.com)
• TCF Bank Files Lawsuit Claiming Durbin Amendment is Unconstitutional (pindebit.blogspot.com)
• Federal Reserve Sued by Minnesota Bank on Debit Caps (businessweek.com)
• Debit-Card Issuer Sues the Fed (online.wsj.com)
• Durbin Interchange Amendment's Exclusivity Prohibition will Gore Network Fees (pindebit.blogspot.com)
• Does Durbin Amendment Position "PIN Debit" as "Signature Debit" Killer? (pindebit.blogspot.com)
• Federal Reserve Reaching Out to Credit Unions on Debit Interchange Rule (pindebit.blogspot.com)

TCF Bank Files Lawsuit Claiming Durbin Amendment is Unconstitutional

October 12, 2010 08:01 AM Eastern Daylight Time 

TCF Bank Files Lawsuit Challenging The Durbin Amendment of the Dodd-Frank Act

-- Complaint Calls Amendment Unconstitutional --

WAYZATA, Minn.--(BUSINESS WIRE)--TCF National Bank (“TCF”), a subsidiary of TCF Financial Corporation (NYSE:TCB), announced that today it is filing a lawsuit challenging the constitutionality of the Durbin Amendment (“the Amendment”). Congress included this Amendment, without hearings, in the Wall Street Reform and Consumer Financial Protection Act of 2010, also known as the Dodd-Frank Act.

“It is unprecedented for Congress, or any regulatory agency, to mandate a fee charged in the free market that not only denies a reasonable rate of return on investment, but actually requires the rate to be lower than the incremental cost of providing the service”

The Durbin Amendment orders the Federal Reserve Board to enact regulations that strictly limit the amount of interchange fees the bank can charge retailers on debit card transactions. The Amendment directs the Federal Reserve Board to measure the processing costs of authorizing, clearing and settling debit card transactions and then to adopt regulations setting debit card interchange rates based on those costs alone. In total, these processing costs amount to only a fraction of the total costs required to manage the debit card system and deliver the product. The Amendment also explicitly mandates that the Federal Reserve Board ignore other costs incurred by banks associated with the creation, administration and improvement of their extensive, highly efficient, debit card systems. Finally, the Amendment applies only to banks like TCF with $10 billion or more in assets, which constitutes just one percent of banks in the country, and exempts all others. The thousands of banks exempted from the Amendment will be free to continue to charge retailers the current debit card interchange rate and recover all their cost plus a profit. This will result in an irrational competitive disadvantage for banks like TCF that are subject to the new regulations.

“It is unprecedented for Congress, or any regulatory agency, to mandate a fee charged in the free market that not only denies a reasonable rate of return on investment, but actually requires the rate to be lower than the incremental cost of providing the service,” said William A. Cooper, Chairman and Chief Executive Officer of TCF Financial Corporation. “Furthermore, the Amendment affects only one percent of the nation’s banks, giving thousands of unaffected banks an unfair competitive advantage.”

“We believe these provisions violate our Constitutional rights on three separate grounds: the regulations take our property without just compensation and without Due Process of Law; and they also deny us Equal Protection under the law,” Cooper said. “The statute makes no more sense than regulating the price of a Burger King^® hamburger solely to the costs of the meat and the bun. To stay in business, Burger King has to sell burgers at prices that cover more than those costs; it also has to cover costs such as paying an employee to make the hamburger and another employee to serve it, the cost of the building and maintenance, as well as the costs incurred to advertise and promote the product. Under the Durbin Amendment, TCF only gets to recover the cost of the bun!”

“The Durbin Amendment blatantly confiscates TCF’s assets by denying the bank an opportunity to earn a fair rate of return on its assets. The Amendment also engages in invidious discrimination against the bank by making it impossible for it to compete on even ground with the thousands of banks that are exempted from the Amendment,” said Richard A. Epstein, a constitutional law scholar who, along with Timothy D. Kelly of Kelly & Berens P.A., has served as counsel to TCF on this case. “Well-established Supreme Court case law prohibits Congressional rate regulation that does not allow the bank to attract and retain the capital necessary to run its debit card business,” Epstein added.

Congress has never enacted any regulatory statute like the Durbin Amendment before: one that requires an administrative agency to order sellers of a product or service to cut their rates to a rate far below their actual cost of delivering the product or service, and then exempts ninety-nine percent of the sellers from the new confiscatory rate. Moreover, the Durbin Amendment was a last minute addition to the Dodd-Frank Act’s comprehensive overhaul of the financial services industry. Neither the Senate nor the House held any hearings on the provision, which would have allowed for public analysis of its most questionable provisions. Few people in Congress, therefore, grasped its revolutionary implications and its punitive impact on the few banks subject to its restrictions.

TCF will host a teleconference to elaborate further on the reasons it chose to file this suit, at which time it will further explain the legal basis for the complaint. Media are welcome to attend in a listen-only mode. The teleconference will occur today, Tuesday, October 12, 2010 at 11:00 a.m. Eastern Time. If you would like to listen to TCF's live teleconference, please dial (877) 245-6230. To listen to the replay of TCF's teleconference, please dial (800) 642-1687 and enter conference ID #17047486. Replay begins two hours after the call is completed and will be available through Wednesday, October 20^th.

TCF's teleconference will also be webcast live on the Investor Relations section of TCF's website, ir.tcfbank.com. In addition, the teleconference will be archived for replay on the website.

TCF National Bank is a subsidiary of TCF Financial Corporation, a Wayzata, Minnesota-based bank holding company with $18 billion in total assets. The company has 441 banking offices in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF also conducts commercial leasing and equipment finance business in all 50 states and commercial inventory finance business in the U.S. and Canada. For more information about TCF, please visit www.tcfbank.com.

Contacts

Media Contacts:
Stanton Communications, Inc.
Angela Ruggiero, 212-616-3601
aruggiero@stantoncomm.com
or
Patrick Brady, 202-223-4933
pbrady@stantoncomm.com
or
Investor Contact:
TCF Financial Corporation
Jason Korstange, 952-745-2755
jkors@tcfbank.com

Permalink: http://www.businesswire.com/news/home/20101012006222/en/TCF-Bank-Files-Lawsuit-Challenging-Durbin-Amendment

Related articles

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• Durbin Statement on TCF's Court Challenge of Interchange Law (pindebit.blogspot.com)
• TCF Bank Files Lawsuit Claiming Durbin Amendment is Unconstitutional (pindebit.blogspot.com)

Electronic Payments Coalition Statement on TCF Bank Lawsuit Challenging Durbin Amendment

Image via Wikipedia

WASHINGTON, Oct. 12 /PRNewswire/ -- From the very beginning, the interchange battle has been a blatant attempt by giant retailers to take advantage of an unstable economic and political environment to increase their own profits at the expense of their customers.  Unfortunately, it is the millions of American debit cardholders who will bear the brunt of the retailers' windfall that will be realized by the Durbin amendment as written in the Dodd-Frank Act.  The lawsuit filed today underscores this, and rightly notes that this issue was a political one, rushed through without a single hearing, study or congressional review of its economic impact. 

About Electronic Payments Coalition

The Electronic Payments Coalition is dedicated to protecting consumer value, choice, and competition in electronic payments systems. The coalition is a broad-based group of payment card networks, financial services companies, and financial services trade associations whose primary goal is to educate policy-makers, consumers, and the media about the value of electronic payments systems — including economic growth, convenience, speed, reliability, and security — and to ensure the continued growth of global commerce by promoting consumer choice and the stability of the vast payment networks that connect millions of consumers with millions of retailers each and every day.

SOURCE Electronic Payments Coalition

Related articles

• Electronic Payments Coalition Statement on TCF Bank Lawsuit Challenging Durbin Amendment (prnewswire.com)

Online Banking's Advanced Persistent Threat

Image via Wikipediahttp://link.brightcove.com/services/player/bcpid610194953001?bclid=610180620001&bctid=610177427001

The advanced persistent threat and security of online banking DATE: 12 Oct 2010 In this video, U.S. Assistant Attorney Erez Liebermann discusses how law enforcement is addressing the advanced persistent threat within the financial industry, as well as the security of online banking. He talks about the case of TJX and Heartland hacker Albert Gonzalez, and also provides advice on what companies should do after a data security breach, including when to call law enforcement.

The Beginning of the End of Signature Debit?

Featured: The Beginning of the End of Signature Debit?

Will PIN Debits' security result in Signature Debit disappearing in a Puff of Smoke?

"From a pure technical security standpoint,  PIN is much more secure,"
Avivah Litan said.  "There's no two ways about it."

...yesterday American Banker reported that Bonneville Bancorp, in an industry first, has announced that it is prohibiting signature debit in some states and posted a notice on their website.  "No signature transactions will be allowed," the notice asserts

In a post last week, entitled "Dead Debit Walking"  I mused that the combination of both the Durbin Amendment and the August 15th effective end of overdraft charges would leave banks without the recurring income that has justified pushing the less secure signature debit over the more secure PIN Debit.

My thoughts were that the disappearance of billions in overdraft and interchange fees would (more than likely) lead to the eventual demise of signature debit.  (and the advent of Chip and PIN in the USA)

Also see: Does Durbin Amendment Position "PIN Debit" as "Signature Debit" Killer?   I admit that I didn't think it would begin to happen as early as a week later, but...

...yesterday American Banker reported that Bonneville Bancorp, in an industry first, has announced that it is prohibiting signature debit in some states and posted a notice on their website.  "No signature transactions will be allowed," the notice asserts


Oh, and by the way...I believe I am also spot on with my assertion that online banking authentication must be done with a peripheral device and concur with the recent quote by Eugene Kaspersky, co-founder of Kaspersky Labs when he called for "mass adoption of peripheral card readers for all internet banking users"

Here's a snippet from American Banker on the Beginning of the End of Signature Debit:


Fraud Woes Prompt Bank to Forego Signature Debit Revenue

Bonneville Bancorp is taking an unusually drastic — and seemingly counterintuitive — approach to fighting fraud. To make sure its customers use their PIN codes, shoring up security for debit purchases, it is prohibiting signature debit payments in some states. Though PIN codes provide an additional layer of security, signature debit transactions generally earn issuers more money, and observers say it is unheard of for a bank to consider its fraud losses severe enough to switch off that revenue stream. According to a notice on Bonneville's website warning of "high amounts of fraudulent card activity in California, Florida and Georgia," customers in those states must use their PIN codes for any debit transactions. "No signature transactions will be allowed," the notice asserts. "All I can think of is that the fraud was so high that the lost interchange revenue is worth it compared to the cost of issuing new accounts," said Avivah Litan, a vice president and distinguished analyst at the Stamford, Conn., market research company Gartner Inc. "It's a statement admitting PIN is more secure, so it contradicts all the marketing messages" from most other banks.

<>

From Peter Guidi  Director, Petroleum Sales at VCMG

Fort Myers, Florida Area Retail John B. Frank adds excellent commentary on the impact of the Durbin Amendment joining with those who see the imminent death of signature debit as one early results of the legislation. His perspective is enlightening. 

" The writing is on the wall.  The recent passing of the Durbin Amendment signifies the "future passing" (demise) of signature debit.  Here's why:  The two biggest reasons signature debit existed in the first place have now been eliminated...

• Reason Number 1:  It created recurring revenue to banks in the form of overdraft charges
• Reason Number 2:  It created recurring revenue to banks in the form of higher interchange fees. 

Read more: http://pindebit.blogspot.com/2010/08/does-durbin-amendment-position-pin.html#ixzz0wJV0aURN

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Read more: http://pindebit.blogspot.com/2010/08/beginning-of-end-of-signature-debit.html#ixzz0x4gAp88T