Emerald Business Systems Blog


Prepaid Debit Card Users Should Use Signature Debit at the Point of Sale

Posted in PCI,POS by ebs4pos on January 5, 2010

The New York Times published an excellent article about debit card transaction fees. One of the themes of the article was why your bank and the card associations (Visa and MasterCard) want you to sign a receipt at the point of sale, and why merchants want you to use your PIN at the point of sale. The piece is a fascinating read, but it leaves one (big) question open: What should a prepaid debit cardholder do at the point of sale? Enter a PIN or sign the receipt? And why? We answer those questions.

The New York Times article discusses the impact these fees have on merchants, banks and Visa and MasterCard, and only touches on the impact on consumers (by noting that the fees that merchants arre charged for signature transactions are ultimately passed on to consumers in the form of higher prices).

But here’s the deal.

Most prepaid debit cardholders need every extra penny in their account… today. They care about having enough money in the account to make it until payday. They don’t care if their choice between signature or PIN might cause the price of goods to go up slightly.

With that said, here are three big reasons why prepaid debit card users should choose to use signature debit rather than PIN debit when at the point of sale.

via Prepaid Debit Card Users Should Use Signature Debit at the Point of Sale.

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