Heartland Payment Systems Inc. has entered into an agreement with Acculynk Inc. to offer its PaySecure payment product to online merchants.
Acculynk's product will be available to Heartland's existing and prospective merchant clients by the end of June. PaySecure is based on PIN-debit transactions, which generally are more secure than signature-debit purchases.
Acculynk said it has used a calculated approach for potential merchant-acquirer partnerships. Heartland mostly is known as a processor, but it offers merchants a variety of payments services.
"Instead of just signing random acquirers, we've been working on [the] Heartland [agreement] for the past six months," Ashish Bahl, Acculynk's chief executive, said. Heartland during that time collected a backlog of merchants interested in adding PaySecure, Bahl said.
Heartland in January 2009 reported that hackers a few months earlier had breached its processing network, capturing credit and debit card numbers and expiration dates.
Considering Heartland's past experience with data-security breaches, Acculynk had "numerous deep dives into the technical aspect of this" with the Princeton, N.J., processor, Bahl said. "On a risk-adjusted basis, this is a relatively safe product compared with others that are out there," he said.
A Heartland executive was not immediately available for comment.
The Heartland deal is similar to Acculynk's partnership with the Dallas merchant services provider JetPay LLC, Bahl said. JetPay also is processor.
Acculynk's latest pact comes just two weeks after it announced its most significant partnership with First Data Corp.
Processor agreements "certainly are an important part of this puzzle for anyone that's going to be in the business," Paul Turgeon, president of Payments & Processing Consultants Inc., said. "They are certainly gaining momentum in that regard."
Turgeon said Acculynk stands to gain more support from issuers pending the outcome of the Federal Reserve Board's proposed 12-cent cap on debit card interchange because Issuers likely would become more concerned about fraud as a lower interchange rate cuts into margins, he said.
"No disrespect to the brand companies, but I believe the brand companies and issuers are not honest about the amount of fraud that occurs in e-commerce and mobile-commerce transactions," Turgeon said. "The transactions have historically been rich enough that they really haven't had to care much."
Acculynk said it has experienced a 50% conversion rate when consumers are asked to enter a PIN upon checkout, Bahl claims. He said he considers that figure encouraging despite the company's tight budget that prevents it from marketing PaySecure to consumers.
"The reason [the conversion rate] has held is because [PaySecure] continues to mimic the [point of sale] experience," Bahl said.
Nine electronic funds transfer networks support PaySecure, including Accel/Exchange, Alaska Option, Credit Union 24, Jeanie, MasterCard Worldwide's Maestro, NetWorks Inc., NYCE, Pulse and Shazam. Acculynk has said it is working on a deal with a 10th, undisclosed network. Noticeably absent from the list are First Data's Star and Visa Inc.'s Interlink, the two largest U.S. networks that support PIN-debit purchases.
