PULSE® Reflects on 40 Years of Debit
In 2021, the PULSE brand is known by financial institutions, merchants and processors throughout the U.S. as a high-quality, competitive choice for debit payment services. The breadth and depth of the services and technology solutions we provide today were unimaginable when the network was established in 1981. The last four decades have been a period of amazing and seemingly ever-accelerating innovation.
Our founding was two years prior to the first generation of cell phones, devices that would fundamentally change how we live. It was 13 years before Netscape introduced the web browser, which overnight made the internet accessible to everyone and opened the door to digital commerce. And it was 30 years before a new breed of apps gave rise to the digital gig economy, redefining relationships among workers, employers and consumers.
“As we celebrate our 40th anniversary, we recognize the enormous importance of our participants, partners and supporters throughout the payments ecosystem,” said Dave Schneider, President of PULSE, who joined the organization in 2000. “Since the very beginning, we have focused on our clients’ interests and success. As we reflect on our biggest accomplishments over the past 40 years, it is clear that everything we have achieved is for and because of them.”
In the Beginning
PULSE, incorporated on July 29, 1981, was established by the major bank holding companies in Texas as a not-for-profit membership association dedicated to facilitating ATM sharing. At its core, the organization’s objective was to provide all member institutions with shared access to a reliable network of ATMs on fair and non-discriminatory terms.
As the needs of members and their customers evolved, we expanded our services. In 1985, we introduced PULSE PAY®, our PIN debit service. While cardholders were accustomed to using what they considered their “ATM card” for cash access, PULSE PAY enabled consumers to pay safely at the point-of-sale by swiping their card and entering their PIN to “debit” the funds from their checking account.
At that point, few could have envisioned the steady rise of debit over the coming decades. For instance, in October 1985, The New York Times observed, “A Check-Writing Nation Ignores the Debit Card.” Obviously, that article did not age well.
Despite detractors, debit slowly gained favor among consumers, who gravitated to its convenience. By 2018, 33 years after PULSE launched PULSE PAY, debit had become the most frequently used payment type, according to a report from the Federal Reserve Bank of San Francisco.
A number of important developments at PULSE contributed to that rise.
Enabling the Future with a History of Innovation
In 1995, the year an online bookstore called Amazon went live and revolutionized digital commerce, PULSE began supporting card-not-present (CNP) PINless bill payment. The capability enabled cardholders to pay using debit online or over the phone. It was a niche service at the time, but today, about one-third of all debit transactions are CNP.
Another major leap forward came in 2005, when Discover® Financial Services acquired PULSE.
“With Discover’s support, PULSE was able to build a full-service debit platform and a comprehensive suite of products, including PINless debit at the point-of-sale, fraud-mitigation services, account-to-account transfers, and mobile and contactless payments,” said Schneider. “Discover also helped us execute on our strategy to compete for all debit transactions and continue to deliver unparalleled service to clients.”
In 2006, PULSE rolled out Discover® Debit, a signature debit card brand that embodied a fresh alternative to legacy debit programs. To help issuers detect and block fraud, we launched DebitProtect® in 2007. Following Discover’s acquisition of Diner’s Club in 2008, our ATM network went global, and now includes 2.2 million cash access locations in 140 countries. In 2013, we launched PULSE PAY® Express to enable cardholders to pay at the POS without entering a PIN.
Over the next two years, we added support for tokenization, digital wallets, and Account Credit and Account Funding transfers. Today, these are among our fastest growing transaction types. And now, PULSE is preparing to bring to market a patent-pending, secure token service and make it available to other back-of-card debit networks. This will help ensure tokenized CNP transactions can be routed to issuers over their back-of-card debit networks.
Debit volume in the U.S. totaled more than $3.6 trillion in 2020, and PULSE is thriving as one of the leading U.S. debit networks. We are proud to serve thousands of banks, credit unions and savings institutions across the country. Despite all the changes that have swept through the payments industry over the 40 years since those Texas bankers joined forces to create PULSE, we remain committed to quality, reliability and the needs of our clients. It’s the secret to our success.