First Data Agrees to Acquire Acculynk, a Pioneer in PIN Debit for Web-Based Transactions

The idea of allowing consumers to use PIN debit cards to pay online merchants has been a tough sell in the payments business, but observers hope a deal announced Thursday may give it a much-needed boost. Processing kingpin First Data Corp. said it will acquire Acculynk Inc., a 9-year-old Atlanta-based company that markets technology called PaySecure to enable buyers to use PIN-debit cards to make purchases on the Web via laptops or smart phones.

In the deal, First Data, also based in Atlanta, will pick up Acculynk’s other services, including Payzur, a person-to-person payment service based on PIN-debit routing, and a government-payment service. Terms were not announced, and a closing date has not yet been set.

“It is incredibly exciting to join forces with First Data as we streamline e-commerce and reduce transaction costs for businesses around the world,” said Ashish Bahl, Acculynk’s chairman and chief executive, in a statement. “First Data’s unrivaled global scale and distribution will greatly expand the footprint of PaySecure, providing benefit to merchants looking to simplify debit card e-commerce transactions for consumers around the world.”

First Data clearly hopes the deal will bolster its merchant offering by relying on PaySecure’s connections to major debit networks, including Accel/Exchange, NYCE, Shazam, and First Data’s own Star system. Altogether, Acculynk has been able to leverage links to half a dozen domestic networks and three international systems to develop additional services, including single- and dual-message PINless transactions and so-called push payments, often used by on-demand platforms for mass payouts.

“Acculynk has established itself as a leading technology innovator, and its debit-routing technology allows First Data to broaden our e-commerce offerings for existing clients and new prospects,” said First Data chief executive Frank Bisignano, in a statement.

Even so, the original business of PIN debit for online transactions has been a slow grind over the years, not just for Acculynk but for a host of startups that have tried to commercialize the idea. With its broad range of related products, Acculynk has been one of the few survivors.

“They’ve had very patient investors, and have made slow and steady progress,” Steve Mott, principal at BetterBuyDesign, a Stamford, Conn.-based payments consultancy, tells Digital Transactions News. Now, under First Data’s umbrella, the company may be able to supercharge its growth, he says. “That’s probably the best home for Acculynk,” says Mott, “They need the heft of a much bigger organization to win adoption for online PIN debit. Now they can extend that out to a much broader audience if First Data can figure out how to sell it.”

Acculynk’s patent portfolio is included in the acquisition. The company was formed in 2008 when it paid $600,000 to buy the key online PIN-debt technology that a company called PayByTouch had acquired three years earlier for $30.5 million. PayByTouch, which specialized in biometrically authenticated point-of sale transactions, had fallen into bankruptcy.

The technology, developed by a startup called ATM Direct, relied on a so-called floating PIN pad served up on a computer screen. To thwart keyloggers, the numerical arrangement on the PIN pad varied each time it was invoked.