Monday, August 9, 2010
MasterCard Worldwide recently disclosed its intention to offer issuing banks an online PIN debit service from technology provider Acculynk. This clears the way for all MasterCard-branded debit cards to become compatible with online PIN debit transactions.
Adoption of Acculynk's service, PaySecure, has been growing since the service debuted in March 2009; however, PaySecure isn't compatible with every kind of debit card, according to Kevin Gallagher, General Manager, E-Commerce for online processor Merchant e-Solutions Inc.
He said whether the PaySecure program is supported can depend on both the debit networks to which a particular card connects and the financial institution from which it is issued. "Even though some of the debit networks are offering it, like NYCE for example, they still have to go back to their financial institutions and, either as a whole or one by one, get them to approve it," Gallagher said.
He noted that with MasterCard's involvement, first MasterCard's "got to buy in. Then the second process is MasterCard goes back to their financial institutions and says, 'OK, guys, are you ready?' And then it gets the collective vote to move forward. But if MasterCard's gone this far, it's only a matter of time before they get the whole thing rolled out."
Merchant e-Solutions has offered PaySecure to its online merchants for about the last year and half, Gallagher said, adding that it's been "picking up steam with several big merchants signing up and our company adding a couple each month."
Gallagher believes merchants like the service because it gets them lower interchange rates and reduces fraud, while MasterCard stands to see an increase in purchasing volume by signing on. He added that MasterCard's endorsement of PaySecure could give online PIN debit a significant boost.
"Up until now you've got guys like [the debit networks] Pulse, NYCE, Accel and Shazam, but here's a big hitter coming in," he said. "So it's definitely a positive push, and I think it will really help bring it to the forefront."
William Bailey, co-owner of payment solutions provider Card Payments International, said the wider use of online PIN debit could ultimately bring down interchange rates for online merchants, who usually pay much higher fees than their brick-and-mortar counterparts.
"I think it will add a level of security and hopefully reduce fraud over the Internet," he said. "I would expect and hope that MasterCard would lower interchange rates and lower some of their fees if they do experience a cost savings."
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