Smart Card Marketing, HomeATM Enable PIN Debit Online, at Stores

In a move that could further the penetration of Internet-based PIN debit, a San Antonio-based processor of prepaid card transactions has adopted a device that will allow users of its electronic-wallet service to load their accounts online with credit cards and PIN debit cards. Smart Card Marketing Systems Inc., which introduced its VelocityMoney.com e-wallet product just six months ago and so far has 1,000 users, will use a device from Montreal-based HomeATM that connects to PCs via a USB cable to allow users to load accounts online with card swipes. The device includes a numeric pad for entry of PINs linked to debit cards. Also, as part of the agreement with Smart Card Marketing Systems, HomeATM will begin reaching the physical point of sale for the first time. Working with an unnamed merchant acquirer, Smart Card Marketing Systems is signing up merchants to accept credit and debit cards through the HomeATM device. The acquirer will process credit card transactions, while HomeATM will handle debit card payments. Smart Card Marketing has booked orders from merchants for 9,000 of the devices so far, says Bruce Baillio, president of the company. Targeting niche merchants that in many cases don't have existing merchant accounts, Smart Card Marketing is offering the HomeATM device as a substitute for conventional point-of-sale terminals and pricing it at around $50. Although the devices will accept credit or debit cards, Baillio says many merchants have a strong interest in PIN debit. “Our merchants are interested in the debit-loading aspects of this,” he notes. A travel agency, for example, finds the service useful to allow customers to load prepaid cards for use on trips, he says. Another client is a processor for small online merchants that wants to enable PIN debit payment, Baillio says. The agreement with Smart Card Marketing represents the second major deal HomeATM, a small engineering company with a handful of Web merchants as clients, has struck in the past two months. In December, the company agreed to use its technology to enable online PIN debit and credit card transactions for airlines linked to the Universal Air Travel Plan transaction switch. At the same time, it applied for a patent on a PIN-authentication system called PinMyCard, which, when paired with its device, could allow merchants to process credit card transactions online at card-present interchange rates. Company officials say this is possible by virtually eliminating the risk of fraud (Digital Transactions News, Dec. 18, 2007). For users of Smart Card Marketing's VelocityMoney.com service, the HomeATM device will enable cardholders to replenish the company's prepaid MasterCard online with the swipe of a credit or PIN debit card. VelocityMoney.com, an e-wallet platform, also allows loading through the automated clearing house, wire transfers, and checks and money orders. The advantage of PIN debit card swipes, Baillio says, is that the company will get good funds the same day. “Unless you're getting physical cash from someone, the time frame of moving money is extended, it could turn into multiple days or a week,” he says. The agreement with Smart Card Marketing does not yet involve HomeATM's PinMyCard system, so online credit card transactions on the devices are being assessed card-not-present interchange, according to Mitchell Cobrin, chief operating officer at HomeATM. But he says talks are under way with Smart Card Marketing to integrate the system and allow card-present rates, which do not carry the premium the card networks levy on card-not-present payments.