Debit Rates Likely To Increase In 2010, ISOs And Acquirers Believe

Independent sales organizations and bank acquirers predict the price merchants pay for debit card transactions likely will increase in 2010, survey data from Boston-based Aite Group LLC suggest. In the survey of 17 bank acquirers and 28 independent sales organizations, 69% of acquirers predicted PIN-debit rates would increase next year compared with 79% of ISOs who thought so. “This event, if it happens, would mean a lot in terms of potential income selling or cross-selling PIN pads or setting up merchants to accept PIN-debit transactions,” says Adil Moussa, the Aite analyst who conducted the survey. Many respondents also believed signature-debit rates also will increase, cited by 75% of participating ISOs and 62% of acquirers. Signature-debit price increases would mean ISOs and acquirers could adjust their qualifying rates, assuming the transaction meets conditions such as card present with full magnetic stripe data. ISO and acquirer debit rates often encompass signature and PIN debit as a way for the companies to build profit margin into such transactions, Moussa says. And because many merchants often buy based on the qualifying rates, rate changes could factor in which service provider the merchant chooses, he says.