PIN Debit Requires Analysis

Effective April 4, 2008, Interlink and Pulse PIN networks dropped the max calculation from their fees for retail merchants. PIN debit has been a low cost alternative to signature debit (check cards) specifically on high ticket items. The primary reason was that the PIN networks capped the costs (ex. $0.65 max). PIN network "Interchange" has continued to increase to compete with signature debit (remember Interchange is paid to the issuers and issuers prefer to issue and promote cards that pay more when used). PIN networks continue to publish more complex Interchange charts with more categories based on type of industry.

While networks like Star continue to have max fee caps in place, the recent removal by Interlink, the largest PIN debit network, will put further pressure on all networks to follow suit to remain competitive. Sales reps that are telling retail merchants that they will offer a "flat transaction fee" or "0% rate" on debit may no longer be able to price merchants this way without marking up rates and fees elsewhere to cover the pricing risk. Keep an eye on the competition in your area and make sure you understand PIN debit pricing.

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