Consumer Payment Card News

PIN Pong

Slowly, but surely, American consumers are getting drawn into the fight between debit card issuers and merchants. By using your VISA or MasterCard-branded debit card like a credit card you can rack up air miles as well as automatically participate in fantastic sweepstakes. However using a PIN (personal identification number) with a VISA or MasterCard-branded debit card may cost you some cold hard cash. Most consumers are aware that you do not have to use a PIN with your debit card to buy stuff. You simply tell the clerk “credit” instead of “debit”, or you push the “credit” button instead of the “debit” button on a payment terminal. Many issuers of VISA and MasterCard now offer rewards and special promotions for customers who do not use a PIN but rather sign for their debit card purchases. While the debit card reward programs are typically not as generous as the credit card programs, they still offer a strong incentive to forget the PIN. Providing further incentives to forget the PIN is the fact that some banks are now charging transaction fees ranging from 25 cents to $1.50 for using a PIN to make a purchase with a debit card. Don’t cut yourself short, use your debit card to your advantage while it lasts. The party could end if U.S. merchants have their way. Within the next year, an anti-trust trial may determine how you use your debit card and the costs associated with it. U.S. merchants want to force customers to use a PIN with a debit card since it lowers their costs, not yours. If this happens you can say goodbye to the reward programs and the neat contests for debit cards. Also, prepare yourself to be nickeled and dimed for each debit card transaction, or go back to old fashioned habit of writing checks.

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