To give its issuing banks more options to cater to the desires and needs of debit cardholders, MasterCard Worldwide says it plans to offer Acculynk Inc.’s PaySecure Internet PIN-debit product to its partner financial institutions.
Some observers have expressed uncertainty over whether Acculynk could attract a major card brand because the perception mostly has been that the card associations prefer to push signature-debit transactions because it generates more interchange revenue for issuers. That, however, is not the case from MasterCard’s perspective.
MasterCard “has clearly recognized that over the last number of years, the U.S. market has embraced PIN debit at the point of sale” says Leland Englebardt, MasterCard group head of the global ATM network. Englebardt initially learned about Acculynk when he was MasterCard’s group head of global debit products.
MasterCard’s issuing banks each have their own strategies for “addressing signature debit and PIN debit as part of their overall account management,” Englebardt says. “MasterCard wants to support its issuing customers in whatever their choice may be about giving their cardholders the functionality that the issuer believes the cardholder needs and wants.”
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.
The recent signing of the financial-reform bill likely will have an impact on which financial institutions decide to add PaySecure, Englebardt says. “In the current environment, there is a great deal that isn’t known yet about what the future dynamics of debit cards and debit transacting will be,” he adds.
The Federal Reserve Board will determine the debit interchange rates by April. Financial institutions will then have several months to implement the changes.
“We will have to get through the next 12 months and see what the environment is before we have a clear picture how the marketplace views [PaySecure],” Englebardt says.
Overall, Acculynk is not too concerned about how debit-interchange reform will affect PaySecure’s use.
Ashish Bahl, Acculynk CEO, says while some uncertainty exists about how deep the interchange cuts will be, a ban on debit exclusivity “opens up our product to a lot of large issuers that potentially may have been tied up by Visa or any one else” (
Regardless of how many MasterCard banks end up using PaySecure, the agreement is another step forward for Acculynk.
The announcement comes just two weeks after Discover Financial Service’s Pulse network decided to roll out PaySecure after a pilot that lasted just more a year (
Last year, Fiserv Inc.’s Accel/Exchange became the first EFT network to commercially roll out PaySecure support. Networks still testing PaySecure include Alaska Option, Credit Union 24, NYCE, Jeanie and Shazam. Jeanie plans to roll out the Acculynk service later this year.
MasterCard’s backing of PaySecure “is important to the perception of the product,” says Patricia Hewitt, director of the debit advisory service at Mercator Advisory Group. “It’s important for Acculynk to have the brand [recognition] of MasterCard,” she adds.
MasterCard’s strategy at this point with PaySecure is sound and somewhat expected because no hard data surrounding Internet PIN-debit transactions exits, Hewitt says. “Offer it, and see what the adoption rate is,” she adds.
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