Why is bypassing the PIN on a debit card something you can do? Doesn’t that defeat the purpose of having a PIN to begin with?
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I understand and agree with the liability issues but in answer to the original question, I use my debit/credit card to pay for gas at the pump. If I use the credit option, I am charged four to ten cents more per gallon. I I use my debit option, I am charged cash price. Not as safe perhaps.
The PIN is used to authenticate you, the customer, to the vendor. Alternatively, they can ask you to sign the receipt to confirm your authenticity. The problem is the PIN is almost never required, and most places don’t even require a signed receipt anymore. In a case of fraud, this becomes their problem. It’s a risk they’re accepting to preserve your experience as the customer in their store.
The PIN is used to authenticate you, the customer, to the vendor. Alternatively, they can ask you to sign the receipt to confirm your authenticity. The problem is the PIN is almost never required, and most places don’t even require a signed receipt anymore. In a case of fraud, this becomes their problem. It’s a risk they’re accepting to preserve your experience as the customer in their store.
In the US, the payments industry has established a “chip and choice” environment. For chip cards, the card issuer can choose whether their cards are PIN-preferring or or non-PIN-preferring (aka signature, although signature requirements have mostly been eliminated).
However, the U.S. Common AID for Debit is always PIN-preferring, which is why so many commenters are making the distinction between credit and debit, and of course older terminals that can’t handle chip are still common in the marketplace.
Anyway, at bypass-enabled (chip) terminals, the merchant, issuer and cardholder each may have a say in how a specific transaction is handled. The issue can set a preference for PIN or or non-PI, and associated floor limits and liability protections for a transaction depending on what verification methods are used (e.g., PIN or maybe a zip code at a gas terminal) or simply relying on the chip cryptogram. The merchant can set preferences at different floor limits than the issuer back could take on (or limit) liability exposure, or the merchant can defer to the cardholder for amounts below the floor limit.
Ultimately, there is a lot of flexibility in the system for issuers and merchants, with some flexibility even passed down to the cardholder. But don’t let any comment here that tries to explain liabilities in simple terms fool you. They are spewing outdated assumptions. Chip choice makes all of the liability shifting behind the scenes more complex and opaque to us customers. And rightly so, we just want to make our purchase quickly and go…and god-forbid we get stuck behind some dinosaur paying with cash, let alone some single-celled swamp-ooze writing up a check!
I assume you mean with tapping the card, or any way to make a payment without putting your PIN in.
It’s a risk vs convineince thing. The bank and the customer have decided the tap limit ($50 or so), and they accept that they could lose that to fraudulent transactions.
For bigger transactions, it’s protected by the pin, for really big transactions you have to call the bank to let your debit work. Mine maxes at $1500 unless I call and let them know a big purchase is coming.
I assume you mean with tapping the card, or any way to make a payment without putting your PIN in.
It’s a risk vs convineince thing. The bank and the customer have decided the tap limit ($50 or so), and they accept that they could lose that to fraudulent transactions.
For bigger transactions, it’s protected by the pin, for really big transactions you have to call the bank to let your debit work. Mine maxes at $1500 unless I call and let them know a big purchase is coming.
In the US, the payments industry has established a “chip and choice” environment. For chip cards, the card issuer can choose whether their cards are PIN-preferring or or non-PIN-preferring (aka signature, although signature requirements have mostly been eliminated).
However, the U.S. Common AID for Debit is always PIN-preferring, which is why so many commenters are making the distinction between credit and debit, and of course older terminals that can’t handle chip are still common in the marketplace.
Anyway, at bypass-enabled (chip) terminals, the merchant, issuer and cardholder each may have a say in how a specific transaction is handled. The issue can set a preference for PIN or or non-PI, and associated floor limits and liability protections for a transaction depending on what verification methods are used (e.g., PIN or maybe a zip code at a gas terminal) or simply relying on the chip cryptogram. The merchant can set preferences at different floor limits than the issuer back could take on (or limit) liability exposure, or the merchant can defer to the cardholder for amounts below the floor limit.
Ultimately, there is a lot of flexibility in the system for issuers and merchants, with some flexibility even passed down to the cardholder. But don’t let any comment here that tries to explain liabilities in simple terms fool you. They are spewing outdated assumptions. Chip choice makes all of the liability shifting behind the scenes more complex and opaque to us customers. And rightly so, we just want to make our purchase quickly and go…and god-forbid we get stuck behind some dinosaur paying with cash, let alone some single-celled swamp-ooze writing up a check!
I assume you mean with tapping the card, or any way to make a payment without putting your PIN in.
It’s a risk vs convineince thing. The bank and the customer have decided the tap limit ($50 or so), and they accept that they could lose that to fraudulent transactions.
For bigger transactions, it’s protected by the pin, for really big transactions you have to call the bank to let your debit work. Mine maxes at $1500 unless I call and let them know a big purchase is coming.
In the US, the payments industry has established a “chip and choice” environment. For chip cards, the card issuer can choose whether their cards are PIN-preferring or or non-PIN-preferring (aka signature, although signature requirements have mostly been eliminated).
However, the U.S. Common AID for Debit is always PIN-preferring, which is why so many commenters are making the distinction between credit and debit, and of course older terminals that can’t handle chip are still common in the marketplace.
Anyway, at bypass-enabled (chip) terminals, the merchant, issuer and cardholder each may have a say in how a specific transaction is handled. The issue can set a preference for PIN or or non-PI, and associated floor limits and liability protections for a transaction depending on what verification methods are used (e.g., PIN or maybe a zip code at a gas terminal) or simply relying on the chip cryptogram. The merchant can set preferences at different floor limits than the issuer back could take on (or limit) liability exposure, or the merchant can defer to the cardholder for amounts below the floor limit.
Ultimately, there is a lot of flexibility in the system for issuers and merchants, with some flexibility even passed down to the cardholder. But don’t let any comment here that tries to explain liabilities in simple terms fool you. They are spewing outdated assumptions. Chip choice makes all of the liability shifting behind the scenes more complex and opaque to us customers. And rightly so, we just want to make our purchase quickly and go…and god-forbid we get stuck behind some dinosaur paying with cash, let alone some single-celled swamp-ooze writing up a check!
Source: used to work in the credit card processing industry.
How a card is processed affects how much it costs to run the card. Every swipe includes a flat fee and/ or a percentage charged that the store/ merchant pays. The fees are based on the risk of a type of transaction being charged back.
For example, a card given over the phone is the highest risk and cost; the card isn’t present, there’s no pin option, and there’s not even a physical evidence of who made the transaction! It is nearly impossible for a bank/ card processor to contest. However, the strongest transaction is a card present, debit with pin. In this case you have the physical card present (the clerk definitely checked your ID against your card signature 😉) and then you punched in a number that you are expressly told to not share with anyone that isn’t allowed to spend your money. And if people find out, it’s your fault. Nearly, impossible to charge back.
As a merchant, you’d want everyone to use debit, right? Well, of course you would! However, this is extremely impractical and likely to piss your customers off. You’re going to lose more money than you’re saving, especially as we go more into card and tap based spending.
So, to answer your question… they’re both there because the merchant wants you to use the more inconvenient option, so they present both.
And don’t get me started on rewards cards.
Sorry for the high and way too detailed answer, lol.
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