Contact us
May 23rd 2018

The Pitfalls and Payoffs of PINless Debit Acceptance

PINless debit acceptance has previously only been available to a small number of very large merchants including Amazon and Uber, but this is changing fast. PINless debit transactions, processed through an EFT (Electronic Funds Transfer) network without the need for a PIN entry, give merchants the option to route transactions away from Visa/Mastercard, and towards alternative networks competing for business.


Merchants currently pay an average of $0.92 per transaction in interchange and network fees for Durbin-exempt online debit card transactions. Through domestic debit networks, this could be over 30% less, with competition on interchange fees and low-fixed-cost network fees. We estimate significant six or seven-figure savings are available for online U.S. merchants, so now is the time to carefully consider the payoffs and pitfalls of your debit arrangements.

There are staggering potential benefits of over $2 billion savings available to card not present merchants who implement an efficient and optimized solution. We break down three key pitfalls, and three potential payoffs, available for merchants who get these arrangements right.


1. The PINless industry is fast-paced and many networks are adding new or improved capabilities each month. Entering into long-term arrangements may not be beneficial as you may incur high costs and risk missing out on industry developments. Ensure any arrangements you put in place are future-proof and that your suppliers keep you updated with any innovations or improved solutions.

2. Various factors affect the analysis you’ll need to conduct to get an accurate picture of your debit solution arrangements. Things like average transaction value, transaction volumes, and card profile splits, may vary month-to-month in some industries. The market is changing fast and merchants need to ensure any analysis done now doesn’t quickly become irrelevant in 12, 6, or even 3 months down the line.

3. Cost is not the only consideration market-leading merchants must keep in mind when implementing new debit arrangements. Changing fraud patterns and no 3DS fraud protection means that merchants, now more than ever, must be aware of fraudsters. Since the U.S. implementation of EMV in October 2011 lowered face-to-face fraud, many fraudsters have turned their attention online – something merchants who process PINless transactions must remain aware of.


1. The savings available to online U.S. merchants who implement PINless arrangements effectively are substantial. A typical eCommerce merchant can expect to save 20-30% savings on interchange and assessment fees. These savings are on top of any additional network incentives or rebates put in place during negotiations.

2. Optimizing and managing a customer’s shopping experience is an important element of any merchant’s online strategy. From the consumer’s point of view, a CNP PINless debit transaction is a seamless and quick process. The consumer enters their 16-digit primary account number (PAN) and a combination of AVS and/or CVV (Address Verification System or Card Verification Value) can be used to verify the transaction.

3. Staying up to date with innovations and industry developments could mean substantial benefits for many merchants. Early adopter benefits are still up for grabs, and using new technology and taking part in pilot programs will ensure merchants remain market-leading.

In Summary

Historically, merchants have been forced to route eCommerce transactions via the Visa and Mastercard global networks. Now, with the increasing prevalence of PINless debit acceptance, merchants can dynamically route online transactions to the network best suited to their unique requirements. Merchants who carefully consider potential pitfalls and payoffs have an incredible opportunity to achieve real bottom-line savings.