CNP Expo: Consumers Get More Comfortable with Debit Online

May 21, 2013

Dan Kramer, senior vice president of Marketing and Merchandising Operations at Shazam, calls the Internet “one of the last great uncharted territories for debit networks.” A Tuesday afternoon session at the 2013 CNP Expo on PIN Debit outlined three major reasons for using PIN-based debit cards online: security, the retention of young (18-24-year-old) consumers who prefer to use PIN-based debit, and the retention and attraction of consumers in international markets, many of whom have PIN-based debit cards but no credit card.

One reason merchants and card issuers have resisted online PIN-based transactions in the past is the notion that customers would not want to enter their PINs on the Web for security reasons. But in fact, the opposite has proved to be true: Because consumers are used to giving their PIN when asked—at the ATM or POS—most feel secure using it when asked online.

“The thought that financial institutions are where my money is safe is what drives PIN-based transactions for consumers” said Nandan Sheth, president and COO of Acculynk. In fact, he noted, “58 percent of consumers prefer using their PIN online because of the level of protection by afforded by taking money directly from their account rather than using credit.”

Frank DiNuzzo, former managing director at American Airlines, supported this, citing a 2011 study that consumers are using credit cards less often, and debit-card usage has been increasing as consumers shy away from relying on credit cards.