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Debit Gaining Favor Among SMEs as Security Rapidly Improves
By Robert Cardworthy, Editor-in-Chief, PYRPTS.com

Nearly half of small businesses use business debit, creating both a strong user base and an opportunity to grow for debit issuers. However, use of personal demand deposit accounts (DDAs) and debit products persists, even among larger small businesses. Converting additional businesses to debit may be harder than it should be.

Several of the EFT debit networks are launching or rapidly developing dual-message debit solutions, in which the authorization and the clearing of information is accomplished in two distinct transactions. New research looks at how dual-message debit allows these networks to compete directly with the global networks in all channels.

Debit routing is in a state of flux at present. EMV and tokenization have taken their toll on the transactions flowing through EFT debit networks. By launching dual-message products, they can now compete for online and mobile transactions as well as gain access to merchants who haven’t incorporated PIN hardware.

Consumers are altering their buying habits to include more online and mobile transactions. At the same time, adoption of the EMV security standard by both card issuers and merchants is expanding rapidly in the United States, making counterfeit card fraud at the physical point of sale much more difficult to perpetrate. These two market changes are causing fraud to shift to the card-not-present environment. 

Debit and 3-D Secure 2.0 represents the market shift toward e-commerce and m-commerce and the enhancements of 3-D Secure 2.0, particularly improvements to the cardholder experience. 

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Blog for Wednesday, April 26, 2017