Friday, January 08, 2010

Signature Debit?

It's weird that "signature debit" dominates the US debit card market - at least according to the New York Times. I don't think there is such a thing here and I can't remember ever doing anything other than keying in a pin number in the US either in recent years... (I banked with HSBC, maybe that explains it). Here, PIN credit cards are increasingly common as are debit and credit cards with chips in them. Credit cards do cost merchants more in Australia than debit cards. From the article it seems that signature debit costs the merchant almost as much as a credit transaction in the US while PIN debit is cheaper. The NYT article has this interesting graphic of trends in US payment vehicles:

Britain has already decided to phase out personal checks by 2018. When will banknotes and coins eventually go too?

1 comment:

Jake Stichler said...

All it entails is saying "credit" when the cashier asks "debit or credit" and signing the slip as if you were using a credit card, even though your card is just a debit card. For you, it all comes from the same place - your checking account. The only real reasons for a consumer to do it are
1. Too lazy to key your PIN for a transaction under $25 (which normally don't require a signature), or
2. Rewards from your bank. Banks know they get higher fees from signatures versus PINs, so they use that as a basis for rewards programs, as well as contests (win tickets to the Olympics, in the case of Visa cards).