Latest Pilot Will Put Online PIN Debit to the Test for Credit Unions

The effort to extend PIN debit to Web-based commerce embraced credit unions this week with the announcement by the Credit Union 24 electronic funds transfer network that it will pilot technology from Acculynk Inc., an Atlanta-based software company. The network, which links more than 100,000 ATMs and almost 500,000 point-of-sale locations, wants to be sure its members won't be left out if Web-based PIN debit gains widespread acceptance among consumers, officials say. “We see this as a growing transaction type that can help [our members] with interchange income,” Jim Gowan, executive vice president and chief operating officer at Tallahassee, Fla.-based Credit Union 24, tells Digital Transactions News. “[The pilot will] make sure they're in the game.” Credit Union 24 becomes the fourth EFT network to announce it will test the Acculynk system to allow consumers to make payments to online merchants with PIN-secured debit card transactions, but it is the first dedicated to linking credit unions. Credit union customers could be more debit-oriented than bank customers, Acculynk says, though this is a proposition the pilot will put to the test. “We'll get good data from credit-union-centric consumers,” says Nandan Sheth, president at Acculynk. “We want to see if that credit union customer drives more transactions per month than the consumer sourced from a bank.” After languishing for years, Web-based PIN debit has picked up momentum in recent months. Discover Financial Services' Pulse network announced a pilot with Acculynk in March, following similar announcements from the Accel/Exchange and NYCE systems, owned by Fiserv Inc. and Metavante Corp., respectively. The Accel/Exchange pilot got under way in March, while Pulse said it will begin its test some time in the second quarter. NYCE has not announced implementation plans, though it said last fall it would also test e-commerce PIN debit with a system from Verient Inc., a San Jose, Calif.-based company (Digital Transactions News, Dec. 3, 2008). At the same time, a combination card swipe-PIN pad peripheral for PCs from HomeATM ePayment Solutions, Montreal, earlier this year became the first such device to achieve compliance with Payment Card Industry PIN Entry Device 2.0 (PCI PED) rules. HomeATM has seen the installed base of these Safe-T-PIN readers grow to more than 40,000 from 5,500 in less than a year. Gowan says details of the pilot, including interchange pricing, a start date, and duration, are still under discussion, though he says it will very likely get under way before the end of the year. He says he hasn't yet had a chance to gauge interest from network members, since the pilot was just announced. “It's just hot off the press,” he says, but “we expect there will be a quite a lot of interest.” In the other Acculynk pilots, not all network members are participating. In some cases, critics say, issuers are holding back out of concern that the software-based Acculynk system doesn't capture full mag-stripe data at the time of the transaction, including discretionary-field data normally captured in a POS transaction. Acculynk's technology, called PaySecure, presents a so-called floating PIN pad on the user's screen, with the numerical arrangement scrambled after each entry. Entries are made by mouse click. Acculynk says PaySecure transactions are fully encrypted. “The level of interest from issuers” both in and out of the pilots, Sheth says, “has been staggering.” He credits this to banks' recognition that merchants may be straying to non-bank alternative-payment brands for online transactions. “They feel they're losing the merchant a little bit,” he says. Two merchants are participating in the pilots so far, ShoppersChoice.com and 2checkout.com. Four merchants are in the “implementation process” and will go live by September, Sheth says. Earlier this year, Chase Paymentech Solutions LLC, the world's largest processor of e-commerce transactions, agreed to acquire merchants for the pilots (Digital Transactions News, March 11).