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Just two weeks after announcing its biggest EFT network partnership with the Discover Financial Service-owned Pulse network, online PIN-debit technology provider Acculynk Inc. landed an even bigger fish. Under a deal announced Wednesday, MasterCard Inc.’s approximately 8,500 U.S. Debit MasterCard issuers will have the option of offering Acculynk’s PaySecure service to their cardholders for online purchases.
Online PIN-debit is just emerging as a viable payment option for electronic commerce, where consumers use credit and signature debit cards most often but are getting more choices all the time, including automated clearing house ones. In partnering with the leader in the Internet PIN-debit niche, MasterCard, which in 2009 had only 27% of bank debit card purchase volume versus 73% for Visa Inc., could gain from some incremental transaction volume should Acculynk’s product prove to be a hit with card issuers and ultimately consumers. “Acculynk helps us further expand our flexibility in supporting whatever strategy our issuing customers choose to adopt for their debit portfolio,” says Leland “Lee” Englebardt, MasterCard’s group head, global ATM network.
Ashish Bahl, Atlanta-based Acculynk’s chief executive, tells Digital Transactions News that his company learned from some debit card issuers that they wanted to offer PIN-debit for e-commerce and took that intelligence to MasterCard. Englebardt says he first met with Acculynk at an industry conference in October 2008 when he was head of MasterCard’s global debit initiatives. “I was intrigued,” he says, describing PaySecure as “robust,” with a user-friendly interface. The system presents the buyer with an on-screen floating PIN-pad in which she enters her PIN with mouse clicks, never leaving the e-commerce site.
Neither MasterCard nor Acculynk would reveal whether any MasterCard issuers are about to launch PaySecure. Englebardt expects it will get issuer traction, but he cautions that it could be a while. Many issuers are hesitating to make major decisions about anything involving debit cards until next year, when the Federal Reserve is supposed to come out with rules implementing debit card interchange controls and other card-acceptance provisions in the so-called Durbin Amendment that is part of the financial-reform bill President Obama signed last week (Digital Transactions News, July 21). “After this legislation, we’re in a period of uncertainty,” he says. “We’re hearing customers say, ‘I’m going to wait and see how things shake out.’ Also, it’s early days and we haven’t had enough time to get feedback from our customers as to what the take-up will be.”
Bahl says the new law might send some transactions MasterCard’s way through PaySecure that it otherwise wouldn’t get because it will ban restrictive transaction-routing policies. “It may be a nice opportunity,” he says.
While Acculynk can count MasterCard, the No. 2 payment card network, as a client, it’s highly uncertain if it will bag market leader Visa. “Visa, because they’re primarily a signature-based network, has not looked very favorably [on Acculynk],” says Bahl. “However, because of Durbin, it could facilitate discussions between the two companies.”
Acculynk now has nine publicly announced network partners, which means issuers belonging to more than one of those will have alternatives through which to offer PaySecure. Englebardt says MasterCard will differentiate itself through its economic package, primarily interchange but which includes other components—MasterCard refuses to discuss financials—and issuer choice. Some of the networks, Englebardt notes, have so-called “opt-out” rules in which the network provides PaySecure to all members unless an issuer tells the network it doesn’t want it. “MasterCard is offering support for PaySecure for the issuers; it’s completely the issuers’ choice as to whether they want to participate,” he says. Some networks, he adds “make it difficult” to opt out. “Any time a network sets up a process by which you have to take some action or meet some criteria in order to exempted from a requirement, then they’re in a position to say what that criteria might be.”
About 1,000 merchants accept PaySecure, according to Bahl.
