Acculynk Inc. has put its independent sales organization reseller program on the backburner as it focuses on its core business, but at least one observer believes the company’s PaySecure Internet-PIN debit product is still a valuable add-on service for merchant acquirers.
JetPay LLC, a Dallas-based merchant-services provider, announced April 19 that PaySecure is now active and available to its merchants as part of a payment transaction-processing suite. JetPay and Acculynk initially announced a partnership in September.
Acculynk enables consumers to use PIN-debit cards to make purchases online by integrating its PaySecure software into a merchant’s online-checkout system. After a consumer enters his card number into a designated field, the system will determine if the card is eligible to be used with a PIN. The consumer has the option to complete the purchase as a signature-debit transaction or as a PIN-debit one.
A virtual PIN pad that appears on the screen scrambles the numbers as a safety precaution each time the consumer enters a digit. The issuing bank’s brand also appears at checkout, providing additional peace of mind for the consumer.
“ISOs should be looking at [PaySecure], especially as more consumers are concerned about online security” when it comes to e-commerce transactions, Adil Moussa, an analyst with Aite Group LLC, tells PaymentsSource.
“This is a no-brainer for ISOs to add if they are dealing with a large number of e-commerce merchants,” Moussa adds.
PaySecure’s safety had been a concern when it first was launched in 2008, but Acculynk insists the product is as secure as it can be at this point.
JetPay, one of the few merchant acquirers offering PaySecure, quickly saw it had an advantage in the marketplace shortly after announcing its Acculynk agreement.
Potential new clients are intrigued with Internet PIN-debit’s potential because it helps merchants tap into consumers who have no other way to pay online using their debit cards, JetPay Chairman Trent Voigt told PaymentSource in November. Prospective clients see the opportunity and then want to understand it better as they evaluate potential partnerships, he added.
Acculynk, meantime, has adjusted its business model in light of the potential impact the Durbin amendment in the Dodd-Frank Wall Street Reform and Consumer Protection Act might cause in the future, according to company CEO Ashish Bahl.
Acculynk’s business model was very clear before Durbin, Bahl says.
For example, if 30% of a merchant’s online business is based on card-not-present signature debit, PaySecure was an opportunity to convert some or all those transactions to a cheaper interchange, Bahl says.
Under Durbin, the interchange rate for all forms of debit drops to 12 cents per transaction from an average of 44 cents today.
Acculynk’s pitch to merchants now is PaySecure’s ability to help them maintain debit spend instead of it migrating to more expensive credit card interchange rates, Bahl says.
Card-not-present signature-debit rates set by Visa Inc. and MasterCard Worldwide typically range from 1.64% and 2.2% of the sale, depending on the type of transaction, according to Acculynk. The final price to merchants for PaySecure typically is 20% to 40% lower that what they would pay for card-not-present signature debit, Acculynk has stated in the past.
The electronic funds transfer networks set the PIN-debit interchange rates, which determine how much the issuer receives from the merchant’s bank for the transaction. The acquiring bank then passes the expense along to the retailer as part of the discount rate, which also covers costs for processing and other services.
Though EFT networks have declined to disclose the rates applied to online transactions such as PaySecure’s, they price it high enough to make it attractive to issuers, Acculynk says.
Networks that support PaySecure include Accel/Exchange, Alaska Option, Credit Union 24, Jeanie, MasterCard Worldwide’s Maestro, NetWorks Inc., NYCE, Pulse and Shazam.
Networks either require their member issuers to support PaySecure, or they give them the ability to opt in; Acculynk has declined to reveal the exact number of issuers that support its system. Some 60 million debit cards are eligible for PaySecure transactions, and Acculynk wants to boost that figure to up to 100 million by the end of the year by adding more EFT network participation and issuers.
