Acculynk Inc. CEO Ashish Bahl last year spent much of his time introducing the company’s PaySecure Internet PIN-debit product to merchants, processors and electronic funds transfer networks. This year, Acculynk will concentrate on increasing merchant acceptance and making more debit cards compatible with the service, Bahl tells PaymentsSource.
Two announcements earlier this week put the company on its way to accomplishing its first goal for 2010.
Merchant e-Solutions Inc., a Redwood City Calif.-based payment processor, announced Jan.19 it will offer its merchants PaySecure as a payment-acceptance option. Acculynk enables consumers to use PIN-debit cards to make purchases online by integrating its PaySecure software into a merchant’s online-checkout system. Cardholders use their computer’s mouse to enter their four-digit PINs into an Acculynk virtual PIN pad that appears on the computer’s monitor.
Fewer than 25 Merchant e-Solutions’ clients are using PaySecure. Several of the processor’s clients last year were involved in a PaySecure pilot, including 2Checkout.com, an authorized reseller for online retailers, and JellyBelly.com, which specializes in selling gourmet jelly beans, according to company general manager Kevin Gallagher.
In a separate announcement, Acculynk announced Spirit Airlines Inc. will add PaySecure to its online checkout system.
While Bahl views both partnerships as significant deals for the company, the Merchant e-Solutions pact includes an Internet retailer that produces $100 million in annual sales. Acculynk says it will reveal that retailer in a couple of weeks. It also expects to announce a third airline at that time. Last year, AirTran Airways became the first airline to offer PaySecure.
“You’re going to see larger, more recognizable brands start to accept PaySecure this year,” Bahl says.
Merchants are eager to accept PIN-debit transactions online to reduce cost. While Bahl would not disclose the exact interchange rates the networks are applying to PaySecure transactions, he says the rates are lower than card-not-present signature debit.
Card-not-present signature debit rates set by Visa Inc. and MasterCard Worldwide typically range from 1.64% and 2.2% depending on the type of transaction, according to Acculynk.
"The final price to the merchant for PaySecure is typically 20% to 40% lower that what they would pay for card-not-present signature debit," according to Danielle Duclos, director of marketing for Acculynk. "The interchange that the isser gets in that final price is set by the EFT networks."
While the EFT networks decline to disclose what the interchange is, "it is priced high enough to make PaySecure attractive to issuers," adds Duclos.
“So far the response has been great [to PaySecure], and it is getting better each month as adoption continues to grow,” Gallagher says. “[Merchants] are seeing lower processing costs, less charge-backs and some incremental business.”
Acculynk expects to add more eligible debit cards near the end of March, Bahl says, noting Alaska Option, Credit Union 24 and Shazam EFT networks could move out of pilot and into full support the system by then.
Last year, Fiserv Inc.’s Accel/Exchange became the first EFT network to commercially roll out PaySecure support. Only 3 million debit cards were eligible for PaySecure before the Accel/Exchange rollout, according to Bahl. “Now we have somewhere between 13.5 million and 20 million cards,” he adds.
Fidelity National Information Services Inc.’s NYCE and Discover Financial Services’ Pulse debit networks are also piloting PaySecure. Pulse revealed to PaymentsSource it is in the process of evaluating the pilot results and expects to roll out the product to its entire network as an optional product in the near future.
Fidelity did not respond to a request for comment.
Acculynk wants 60 million eligible debit cards by the end of the year, Bahl says. But it will have to accomplish that without some of the bigger networks, including Visa Inc.’s Interlink. “We had some early dialogue with them, but they are such a proponent of signature debit,” Bahl says. “They would like to see us go away.”
Visa did not respond to a request for comment.
Acculynk plans to get involved in the kiosk space and is in discussions with two leading manufacturers to deploy machines that support PaySecure payments, Bahl says. Companies such as wireless phone providers that have payment kiosks at retail locations can save on interchange fees because transactions would be processed at cheaper PIN-debit rates.
