NYCE Corp., which has been trying for years to come up with a way for consumers to use PIN-secured debit cards for Internet transactions, may have found an answer in a system called SpeedPay that handles recurring online payments - albeit without the PIN.
The system is operated by E Commerce Group of New York, which like NYCE is majority-owned by First Data Corp. of Denver. E Commerce was running SpeedPay before First Data acquired it last year but did not begin handling NYCE-branded cards until January.
SpeedPay now supports NYCE-, Star-, Honor-, and MAC-branded cards.
NYCE's first attempt to build an e-commerce product for PIN debit transactions was SafeDebit, a CD-ROM-based system. It never took off and has been shelved.
Separately, NYCE has been developing a system that would let consumers use PIN debit cards to direct money to other people's deposit accounts, using automated teller machines, the Internet, or tellers. The Montvale, N.J., company considers this product more promising than SafeDebit, but it is still in the early stages.
The types of payments being offered through E Commerce are not exactly what NYCE had in mind when it was devising SafeDebit - for instance, they are not secured by a personal identification number - but they facilitate the use of NYCE-branded cards for remote transactions, which has been a goal.
SpeedPay, which is used by about 1,200 billing companies, lets consumers pay recurring bills by Internet or telephone, usually for a fee of about $5 per transaction. They go to a company's Web site, click on the SpeedPay icon (or, by phone, move through a voice-response menu), and enter their debit card number, in the same way they would pay with a credit card.
The PIN is not required because the bills being paid are for such things as utilities, mortgages, or telecommunications services - not ones a fraudster would attempt to pay. Attaching the PIN had been the logistical stumbling block for NYCE in the past.
"It's unlikely that anyone would use a debit card fraudulently to pay their gas bill," said James S. Judd, a NYCE senior vice president.
Companies that let customers use SpeedPay include Ameren Corp., Cendant Mortgage, and Sprint PCS.
