Pinless Debit: Challenges for Some Members

The debate about interchange income continues between merchants and financial institutions, and unfortunately members are being caught in the crossfire.

This time, members hoping to earn higher dividends with PayBack Savings or earn reward points may find they’re missing out when merchants don’t process a debit-card purchase as a signature-based transaction as you may have requested.

There are various networks for card transactions – a signature-based network for credit cards, and a pin network for debit. In 2011, Congress allowed merchants to choose which card network to use when processing debit card purchases.

Because it saves them money, many big-box stores use the pin network – regardless of what the customer wants. That means that even when you select “credit” to sign for a purchase with a debit card, the merchant can process it as pin transaction up to a certain dollar amount.

This could create a problem for members tracking signature-based debit card swipes to earn PayBack dividends or trying to earn reward points.

PayBack Savings rewards members who use Family Trust as their primary financial institution. You can earn higher dividends if you have a loan and a checking account with us, use online banking, and sign for your credit or debit card purchases at least 10 times each month.

To be sure you’re meeting monthly requirements to earn the PayBack dividend, you can:

  • Use your Visa credit card instead of your debit card when making purchases.
  • Shop online where purchases are considered “card-not-present.” Note though that online shopping can be risky, especially when using debit.

To make sure you’re not missing out on reward points, use your Platinum credit card instead of your debit card. In fact, Platinum credit card users earn one point for every $1 spent; debit card users earn one point for every $3 spent. Learn more about Platinum credit cards.

We apologize for the inconvenience and wish it was easier for you. This matter is being controlled by the merchants and out of our control.

The changing environment requires us to constantly review our products and processes. In fact, we lowered the card swipe requirements for PayBack dividends to 10 from 25 last year in anticipation of what the merchants are now doing. We are again reviewing the terms of our accounts and will always seek to make changes that benefit our members.