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Acculynk Inc., which on Wednesday announced it has signed up American Airlines Inc., says the recruitment of its largest merchant yet indicates stronger interest among online retailers in accepting PIN debit transactions.
Indeed, Ashish Bahl, chairman and chief executive of the Atlanta-based company, tells Digital Transactions News it expects to announce another major airline client very soon. With the momentum from this and other merchant sign-ups, Acculynk should be processing more than 1 million transactions per month within four months. “My goal to the [Acculynk] board is to hit that by the end of the year,” Bahl says, without disclosing current volume.
Bahl adds that the company is working to bring live five unnamed merchants sizable enough to rank in the Fortune 500 list, while another seven Fortune 500 retailers have given “verbal” commitments to come on board. “We’ve never been in this position before,” says Bahl, referring to the rate at which larger merchants are adopting Acculynk’s PaySecure service. PaySecure uses a virtual PIN pad displayed on-screen to let consumers use their PIN debit cards for online transactions.
The apparent momentum in merchant signings and implementation work follow Acculynk’s recruitment over the past four years of some 11 U.S. EFT networks, giving it connections to all of the major U.S. PIN-debit switches except Interlink, a unit of Visa Inc. The company started in 2008 when investors bought the assets of a technology company called ATM Direct for $600,000 after ATM Direct’s owner, Pay By Touch Inc., filed for bankruptcy.
With American Airlines, Acculynk has landed not only its biggest airline client to date but also its biggest merchant period. The Fort Worth, Texas-based carrier, which is in the midst of a restructuring plan after filing last November for bankruptcy protection, recorded some $17.9 billion in passenger revenue in 2011. Roughly one-third of the carrier’s volume is processed through its Web site, AA.com. “This is an e-commerce juggernaut,” says Bahl.
Part of Acculynk’s appeal, Bahl says, is that it lets online merchants tap into PIN debit, a form of debit that has succeeded at the point of sale but struggled to find a place in e-commerce, largely because of security concerns. As a result, signature debit has been the predominant form of debit online, despite its higher levels of fraud. “This [agreement with Acculynk] allows us to be more responsive to markets that are debit-centric,” says Frank DiNuzzo, managing director for marketing performance at American Airlines. PIN debit, in particular, “is a more secure form of payment,” he adds, pointing to industry surveys showing consumers feel more secure using debit online if they can use a PIN.
Acculynk’s connection to the Puerto Rico-based ATH network, in particular, gives the carrier access to debit markets in the Caribbean that are largely PIN-only. ATH claims more than 2.5 million debit cards. “We’ve always been extremely strong in the Caribbean,” DiNuzzo says.
Adds Bahl: “American Airlines really loved the fraud benefits, but what really helped us was the revenue lift [for the airline] from the PIN-only cards. If you can create lift, if you can just get a fraction of these cards and convert that to revenue, that is substantial.”
DiNuzzo also wants to be able to attract potential customers in all markets who are disinclined to use debit online unless they can use a PIN. “We’re looking for scope,” he says. “We want the widest reach in the marketplace.”
