Accel/Exchange Plans a Big Acquiring Push for Online PIN Debit

The Accel/Exchange electronic funds transfer network, which on Nov. 9 became the first EFT network to roll out online PIN debit to consumers, is pleased with results so far and has plans to begin a major recruitment drive to sign up merchant acquirers for the program next year, says Michael Kelly, general manager of the Morris Plains, N.J.-based network. He adds that the network plans to introduce permanent pricing for the transactions in the spring. Volume has been modest, Kelly says, cautioning that it's early days for the program, which allows consumers to use their Accel/Exchange debit cards, with their PINs, to make purchases with online merchants. He will not disclose volume numbers, but since the product launched more than 30 days ago, it might be getting a boost from some holiday spending. “Things are going really well,” he says. “We're happy with the initial push. The sky's the limit.” Consumers have reacted favorably, but for transactions to pick up the network will need to add more merchants and see its bank members promote the program more, Kelly says. The network is leaving consumer marketing to its members and to merchants, he says. As for merchant recruitment, however, Kelly says a big push is slated for next year to get acquirers to sell the product. “We need more merchants, clearly, but we have a plan and we're executing against it,” he says. “Our strategy is to go get the merchant acquirers. [Then] you can generate volume very quickly.” Six merchants are currently accepting Accel/Exchange transactions online: AirTran Airways, Ace Hardware Outlet, online wine seller JJ Buckley, ShoppersChoice.com, candy seller Jelly Belly, and 2Checkout.com. These merchants came on board during a pilot Accel/Exchange ran before going systemwide with the program. Kelly did not name any particular acquirers as targets for next year's push, but three processors, Chase Paymentech Solutions LLC, Merchant e-Solutions, and Elavon, agreed earlier this year to acquire transactions for PaySecure, the system Accel/Exchange is relying on to process transactions (Digital Transactions News, March 11). PaySecure comes from Atlanta-based software house Acculynk Inc. Accel/Exchange is a unit of Milwaukee-based processor Fiserv Inc. With the rollout, about 1,500 of the network's 2,500 financial institutions have the capability of authorizing transactions, Kelly says. Since the program is a card-not-present system, issuing banks must have the ability to support so-called host-based PIN offsets, the codes that allow issuers to authorize PINs. With point-of-sale PIN debit, many issuers rely on offsets embedded in Track 2 data on debit cards, which can be read at the terminal. “This is really a different [type of] transaction,” Kelly notes. PaySecure works by letting the consumer enter her PIN on a so-called floating PIN pad, which is presented at checkout on her PC screen. The digits on this virtual PIN pad are rescrambled with each entry, a technique Acculynk says helps ensure security. The software also encrypts the PINs before passing them along to the network. Pricing for now is the same as that used during the pilot, but Kelly says permanent network interchange pricing for online PIN debit will be announced in the spring. This is still being worked out, but since the transactions feature two-factor authentication and real-time funds settlement, Kelly says they will carry a premium to POS PIN debit, but will likely cost less than signature-debit payments. “Merchants are willing to pay a premium,” he says. “It's a cleaner transaction for both sides.” In the meantime, with online PIN debit now a commercial reality, the network is gearing up to support the new product. “You don't often get a chance to crack into a new market like this,” says Kelly. “We're putting a lot of resources against it.” Accel/Exchange might be followed soon into online PIN debit by other EFT networks. Acculynk has agreements with half a dozen networks, including Pulse and NYCE, which are large regional systems. NYCE is also sponsoring an online PIN debit program that uses a system from a software house called Verient Inc. Called SafeDebit, the program will become part of CardinalCommerce Corp.'s Cardinal Centinel platform of online payment alternatives, according to an announcement this week from NYCE.