Last year Americans purchased $180 billion of stuff using a PIN with a debit card at retailers nationwide. By contrast, U.S. consumers made $318 billion in purchases during 2002 using a VISA or MasterCard-branded debit card without a PIN. But after a decade of solid growth in non-PIN debit card transactions the tide has turned. Last year PIN debit card transaction dollar volume surged by 44% while non-PIN debit card transaction dollar volume slowed to an 18% growth rate. The fall of non-PIN debit card use has been driven by the use of debit card sniffers at checkout terminals. If a consumer pulls out his debit card, then special software will automatically prompt the user to enter their PIN. If the user does not want to use a PIN, or has forgotten their PIN, he or she must cancel the transaction and press more buttons to use his debit card like a credit card. The strategy has worked so well that Wal-Mart reportedly processes more PIN debit transactions today than non-PIN debit transactions.
PIN (or online) Debit Transactions in the USA 1998: $55 billion (+25%) 1999: $71 billion (+29%) 2000: $90 billion (+27%) 2001: $125 billion (+39%) 2002: $180 billion (+44%) excludes cash advances at ATMs or the point-of-sale Source: RAM Research Group (www.ramresearch.com) NON-PIN (or offline or signature) Debit Transactions in the USA 1998: $160 billion (+44%) 1999: $219 billion (+37%) 2000: $302 billion (+38%) 2001: $421 billion (+39%) 2002: $496 billion (+18%) includes purchases and cash advances for VISA and MasterCard-branded debit cards Source: CardWeb.com's CardData (www.carddata.com)