Processor Says E-Commerce Merchants Ignoring PIN Debit Will Be Left Behind
June 16, 2011
After last week’s vote on the Tester-Corker Amendment, implementation of some version of the Durbin amendment is now a certainty. The natural reaction of issuing banks to a reduction in revenue from signature debit will be added focus on credit and PIN debit. According to Acculynk, e-commerce merchants that want to take advantage of the lowest cost payment type are going to have to set themselves up for PIN debit acceptance. The Atlanta-based e-commerce processor said its graphical PIN pad product, PaySecure, will enable exactly that. “PIN debit is clearly the answer to Durbin,” said Corey Tisdale, CEO of ShoppersChoice.com, an Acculynk customer that uses PaySecure. “The interchange and fraud rates on PIN debit are lower than credit cards, and most consumers already associate using a PIN number with using a debit card. The PaySecure graphical PIN pad is a seamless and secure way to take advantage of Durbin’s lower transaction fees.” For the majority of issuers, the margin compression of going from approximately 170 basis points (bps) in card not present interchange to a currently targeted cap of $0.12 (approximately 27bps) makes online signature debit economically unviable because of the fraud costs, Acculynk said. As financial institutions increasingly issue PIN-only debit cards, E-commerce merchants will need to be able to capture those transactions or risk losing that customer segment.