Posted by
John B. Frank
Tuesday, March 25, 2008
Consumers believe it's more secure than signature credit and debit transactions and Online Retailers would love to eliminate chargebacks, let alone, reduce their Interchange Fees by 100 basis points. So it appears that bringing PIN Debit and PIN Credit transactions to the web is just going to be the natural order of things.HomeATM is positioned to help consumers and online retailers do just that with their patented browser space PIN debit application, which includes being able to assign PIN's to previous Non-PIN'd existing credit and signature debit cards.Here's the report from Gartner:U.S banks have put significant efforts into marketing contactless and signature-based debit card payments, but they have failed to win over consumers, according to market research firm Gartner.According to a survey of 4,500 online U.S. adults in August 2007, consumers prefer PIN debit over other payment methods such as credit cards, contactless cards and signature-based debit.PIN debit is popular with cardholders, as they believe it is more secure than signature based transactions, Gartner says.“Despite significant marketing campaigns by banks and issuers to steer consumers towards using debit cards with a signature, consumers prefer entering their PIN to pay for groceries with their debit card over all types of signature-based card payments, whether credit or debit,” says Avivah Litan, vice president and distinguished analyst at Gartner.Consumers’ least-favorite payment method when shopping for groceries is contactless cards, and there is similarly little interest in using cellphones for making payments, Gartner says.According to Litan, banks promote signature-based debit payments as they earn more interchange fee revenue from card-accepting merchants. “The reason is that signature-based debit is riskier and more prone to theft, so banks need to earn higher interchange fees to compensate,” Litan says.Fraud rates on signature-based debit card payments are at least 10 times higher than on PIN debit.Gartner adds that contactless debit and credit card transactions earn issuers higher interchange fees than contact-based transactions. The Gartner survey found that, when shopping at grocery stories, consumers prefer PIN-debit card payments, even though only card payments with physically signed receipts typically earn them reward points. “Brick-and-mortar businesses which accept electronic consumer payments should promote use of PIN-based debit card payments through payment terminal programs and by offering store-based incentive campaigns,” Litan says.“Businesses pay less to banks for PIN-based payments, and, since consumers prefer them anyway, this is a win-win strategy for all parties except card issuers and banks.” Related Links: www.gartner.comWhy Aren’t More Merchants Prompting for PIN - Digital Transaction NewsU.S. Consumer Secure Payment Preferences Create Opportunities for NonbanksAnother U.S. Alternative Payment Service DebutsU.S. E-Shoppers Turning to Alternative PaymentsSurge Seen In U.S. Alternative Payments
Consumers believe it's more secure than signature credit and debit transactions and Online Retailers would love to eliminate chargebacks, let alone, reduce their Interchange Fees by 100 basis points. 
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