Skip to main content

PINless – Got a Handle On It?

What You Need to Know about Growth in PINless

What do consumers want from their debit cards? A fast, convenient, safe way to make purchases. Or in today’s world, what we call, “frictionless payments.”

Financial institutions that are meeting this consumer demand are harnessing the uptick in PINless economics as consumers reach for their debit cards at the point of sale and online.

In the past, PINless transactions were only seen from the major card brands, Discover, Visa, Mastercard and American Express. Those days are gone as the traditional PIN or EFT, networks are now processing PINless payments. For PULSE issuers, this means you need to be prepared to see PULSE PAY® Express (PPE) transactions larger than $50 coming from the network.

The big takeaway? You should treat these payments exactly the same as you’re treating PINless transactions you’re already seeing from the major card brands.  

Consumers prefer inserting their cards without the need for a PIN or signature. Merchants like low network fees. But what’s in it for issuers? And how can you take advantage of these transactions now coming from the EFT networks?

Superior Net Economics

PINless transactions have been around for years, and with large retailers accepting PINless transactions for larger purchases, financial institutions will continue to see these transactions from both their EFT networks and the major card brands.

These PINless transactions processed by the PULSE Network can be lucrative for issuers because PPE interchange is benchmarked to and competitive with Visa and Mastercard interchange. But where you will really see the economics play in your favor is when it comes to fees. Because PULSE has low network fees, a shift in the transaction volume from a card brand to a network should result in more profitable transactions overall.

Process Stays the Same

Issuers have seen PINless debit transactions for years from Discover, Visa and Mastercard. The only difference is that financial institutions may be seeing these transactions coming from different sources, including PULSE.

For the last several years, PULSE has offered PINless transactions. What’s new is the ticket size of those transactions. Issuers should treat these larger PINless payments the same way you treat Discover, Visa and Mastercard debit transactions that are not verified by a PIN.

No Added Risk

If issuers apply the same fraud-monitoring rules already in place for Discover, Visa and Mastercard debit transactions to PPE volume, you shouldn’t see increased risk.

PULSE monitors PPE transactions very carefully to identify fraud patterns and reacts by blocking suspicious transactions on the issuer’s behalf with minimal impact on cardholders. With a team of fraud analysts onsite, you can talk with PULSE anytime to make sure you have the most up-to-date fraud mitigation strategy in place.

What’s Next

One other major development this spring will be the end of signature verification requirements. As of April 2018, Discover, PULSE and Mastercard have announced that merchants will no longer be required to collect signature on any debit transactions.

PINless will continue to grow and you’ll continue to see these transactions across card brand and EFT networks, which is good news for you, merchants and cardholders.