Consumer Payment Card News

PIN or SIG?

A new study has determined that the use of a PIN to authorize debit card purchases is about 15 times more secure than signature debit card transactions. However, this has little direct impact on consumers since the major card networks stand behind signature debit card transactions. Nevertheless, the study commissioned by the PULSE EFT Association calculated that the costs associated with PIN debit fraud at the point of sale currently amount to $.001 per transaction, or .29 basis points. By comparison, losses related to signature debit are $.016 per transaction, or 4.21 basis points. In other words, PIN-related fraud costs financial institutions approximately $.04 per card per year, while signature debit losses amount to $1.15 per card annually. Last year, financial institutions lost $193 million to signature debit losses and $8 million to PIN debit fraud.

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