Star, First Data Corp.’s electronic funds transfer network, is moving forward with plans to focus more heavily on e-commerce by signing a nonbinding letter of intent to participate in CardinalCommerce Corp.’s Universal PIN Debit Service.
Mentor, Ohio-based Cardinal last year introduced the service, which enables merchants to accept process payment authentications and alternative-payment brands independent of online-payment gateways, shopping-cart software and processors.
Star is the first network to have a working agreement with Cardinal.
CardinalCommerce’s PIN Debit Service takes data from a PIN-debit card and converts it to a more system-friendly set of numbers, company CEO Michael Keresman told PaymentsSource last year (
Keresman at the time declined to reveal more-specific details on how the Universal PIN Debit service works. A CardinalCommerce executive was not immediately available to comment on the Star partnership.
The technology gives PIN-debit networks an opportunity to gain traction in the online, and later mobile, marketplace as commerce shifts from the face-to-face environment to remote methods, Keresman said at the time.
“Every dollar that shifts to a remote [payment method] is a dollar lost” for the PIN-debit brands, Keresman added.
Star views CardinalCommerce’s PIN Debit Service as a vehicle to get online-authentication services into the hands of its member banks and merchants, Julie Saville, Star vice president of product development, tells PaymentsSource.
“[CardinalCommerce] already knows how to take different authentication technologies and streamline them at [merchant’s] online checkout so that consumers can easily use them” and not become confused when completing a purchase, she says.
The company’s system enables online shoppers to use their ATM or debit cards to make purchases using the cardholder authentication method chosen by their financial institution. The service supports multiple authentication choices. If and when a final agreement between Star and CardinalCommerce occurs, new authentication options would be made available to Star member financial institutions based on demand.
Which authentication methods financial institutions will use remains to be seen, Saville says.
“We’re going to see some experimentation there,” she says. “In the end, I think a financial institution is going to end up with two forms of authentication, one at the physical point of sale and one at all of their remote channels.”
Keresman said last year card issuers ultimately would determine how consumers authenticate their online or mobile purchases at checkout.
Subsequently, merchant sites could ask consumers to enter a PIN, use a peripheral device attached to a computer or phone, or something different altogether, Keresman said.
Either way, Star wants every one of its transactions authenticated, even if it is through a third-party such as CardinalCommerce, Saville says.
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