Investing in Debit Success
PULSE is making strategic investments in areas we believe will benefit clients in both the near- and long-term. Jennifer Schroeder, who leads the network’s Product Management department, detailed these investments in a recent client presentation.
Schroeder focused on three areas in which PULSE is investing in debit success, highlighting initiatives the network will focus on in the remainder of 2024 and beyond.
Enhancing Network Capabilities
Nearly half of consumers expect to spend most of their discretionary income online, according to 451 Research’s annual Global Consumer Survey. With more cardholders choosing debit for digital payments, and more merchants routing card-not-present (CNP) debit transactions to back-of-card networks after last year’s Regulation II clarification, PULSE is investing in CNP enhancements.
Recurring Payments
One of the areas we are enhancing is PINless Bill Pay and Recurring Payments. “Is a Chewy’s auto-ship a recurring payment or traditional card-on-file e-commerce?,” Schroeder asked. As the lines between these payment types blur, it is critical for issuers to accurately identify recurring transactions, as this implies a relationship between the merchant and cardholder that is less likely to be fraudulent.
PULSE has a recurring payment indicator, but all parties will benefit from greater clarity around its use. The network’s Product team is working to identify merchants and merchant acquirers that commonly route these types of transactions, with the objective of creating clear definitions and rules around them.
Incremental Authorizations
PULSE also is adding clarity around incremental authorizations. These occur when a purchase starts at one amount and ends at a different amount. Examples include ride-share purchases, when a consumer adds a stop, and online grocery orders, in which items are added to or removed from an order between its initiation and completion. While these transactions have worked on PULSE for several years, the network recently clarified its documentation to prevent multiple unnecessary authorization requests and ensure cardholders don’t encounter unnecessary holds on funds.
Tokenization
PULSE also developed a Side-by-Side Token Service that enables both routing choice and security authentication on tokenized card-on-file debit transactions for the first time. PULSE is working to enable token requestor aggregators, such as acquirers, and is enrolling issuers so merchants can tokenize the issuers’ credentials.
“We are currently working to certify our first acquirer, Worldpay, in the third quarter of this year,” said Schroeder. “Following certification, we anticipate pilot activities with broad market launch to follow.” PULSE will mandate issuer participation and will begin enrolling eligible issuer BINs in the coming months.
Additional Enhancements
PULSE is improving authorization rates through its Real-Time Account Updater service. Three acquirer processors are preparing to begin using the service this year.
Schroeder also touched on initiatives related to expanding acceptance of Discover® Debit, including support for digital wallets, debt repayment, infrastructure, and Account Updater for Discover Debit issuers. And she pointed to work aimed at expanding PULSE’s Gateway Services options and rewriting the network’s Operating Rules.
“Our investments in strategic product areas will shape a successful future for PULSE and our partners.”
Jennifer Schroeder
Support Beyond the Transaction
PULSE client support extends beyond network capabilities in two key areas:
1. Industry Advocacy
“Our advocacy efforts are centered on promoting choice and competition in the payments marketplace,” said Schroeder. “We believe all stakeholders in payments benefit from greater choice and fair market competition.”
Individuals at PULSE and Discover closely monitor industry developments, engage with policymakers, and participate in several industry forums, including US Payments Forum, American Transaction Processors Coalition, and Faster Payments Council.
2. Research, Content, and Insights
The network’s Marketing team produces an array of content focused on debit and payments overall. The cornerstone of our research efforts is the annual Debit Issuer Study, with the 2024 installment slated for release in August. Two important resources in the area of content and insights are the PULSE Live Webinar Series and Payments & You content hub.
Investing in People
The final area in which PULSE invests in debit success is people. We work to attract, train, develop, and retain the debit and payments expertise necessary to support our growth and your success. This includes a focus on diversity, equity, and inclusion (DE&I).
“Our DE&I efforts support broader Discover initiatives to increase representation of women and people of color at all levels of management and to support a diverse pool of qualified candidates in hiring,” said Schroeder. For example, to attract a diverse pool of early-career candidates, we are partnering with career centers at local Houston universities.
And finally, to guide the development of early-career professionals in the organization, we are designing career-pathing programs to create a depth of knowledge and subject-matter expertise that will position these individuals for future success. “As you might imagine, once we get them into our organization, the goal is to retain them,” said Schroeder.
“We feel strongly that our investments in strategic product areas, support beyond the transaction, and development of our teams and leaders will shape a successful future for PULSE and our partners.”