Debit is becoming the dominant form of payment for many consumers as the trends in ATM cash withdrawals and credit card transactions both remain flat or grew only slightly. In fact, U.S. debit card transactions have consistently increased each year for the last five years, reaching an estimated 2006 transaction volume of $1.023 trillion, an increase of 22% over 2005.
Furthermore, PIN-debit transaction volume climbed by 24% in 2005 compared to 2004, while signature-based debit volume increased by about 15% during that time, according to the EFT Data Book, 2006 Edition.
That 2005 PIN-based debit growth was higher than signature-based debit growth suggests that the tide may have turned in favor of PIN-debit transactions. This is supported by Mintel’s research, which found that 57% of respondents with debit cards use their PIN always or almost always, while 40% use signature-based debit always or almost always.
Maximize the Experience
Regardless of how you look at it, managing a debit card program means managing tremendous growth. So how do you best manage this growth while maintaining a high service level and maximizing your investment in the debit card program? Can integration of your signature and PIN debit programs help achieve this goal? That is the question asked in most business planning sessions – why integrate? Integration may very well be the answer to maximizing the debit experience at all points of contact.
A single point for settlement, authorizations, risk management, member-selected PINs, card activation, cardholder information, telecommunications, 24x7 member service, and reporting are just some of the benefits of Signature/PIN integration.
The reduction of redundancy by no longer managing two processors and processes for the same card/account/member will translate into better institutional efficiency and improved returns. When you integrate Signature and PIN transactions into a single processing platform, it allows your credit union to focus on the account/card/member level as opposed to the transaction level. This provides a more secure and service-oriented experience for your members.
Protect the Cardholder
Identity theft and other types of debit card fraud pose a very real threat to today’s consumers. Depending on the source of the estimates, the threat could reach hundreds of millions of dollars in annual losses or soar to billions of dollars. TowerGroup , MasterCard Inc.'s advisory arm, estimates fraud on signature and PIN-debit cards will exceed $1 billion in 2006 and could surpass $2 billion by 2010 if issuers fail to implement enhanced security procedures. Integration allows for fraud monitoring to occur at the credit union, cardholder, merchant, and transaction levels. However without integration, fraud monitoring becomes fragmented and the split processor can only monitor transaction activity for possible fraud at the PIN or signature level.
Pick the Partner
The best integrated platform is one designed to offer flexible integrated processing options, which provides choices that best fit your Debit and ATM portfolio set-up.
When selecting a partner, it is important to look for an industry leader in debit integration, one that provides full-service project management, service, ongoing debit marketing and product support. It goes without saying that a partner must have the necessary experience to assure your credit union a smooth transition.
Established in 1977, PSCU Financial Services provides to its member-owners a broad array of cost-effective, high quality financial services that include debit, ATM, credit, prepaid, online bill payment and contact center solutions. For more information on how you can grow your credit union through a partnership with PSCU Financial Services, visit www.pscufs.com.
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