Pay By Touch and pin-based debit

I visited Pay By Touch’s offices in San Francisco yesterday, and spent time with some of the team there. I am fast becoming a fan of the services that Pay by Touch and iPay (their division that handles online payments) provides. In addition to credit card and ACH processing, iPay plans to deliver an internet, pin-based debit solution in the near future. It’s the same thing you’re used to using at the supermarket POS or at the gas pump, only soon you’ll being seeing it on the internet. The processing costs for mechants will be much lower than credit cards, and just a bit more than ACH. So, in a way, this offers the convenience and speed of a credit card transaction, at nearly the cost of ACH.

It will be interesting to see how consumers react to being asked to enter their pin number when paying with their debit cards online. Even more interesting though, is how internet pin-based debit could be used to spur innovation within the PSP (payment service provider) space. For anyone that wants to build a payment system similar to PayPal that relies on a huge network of stored value accounts to reduce costs and reliance on interchange, pin-based debit could become a killer way to fund stored value accounts. Unlike ACH which takes days and can’t guarantee funds in real time, pin-based debit could get your stored value account funded and ready to go within seconds. Currently, this technology is still in development for internet transactions, and it could be a little while before operating standards are established and we’ll know how much creativity and shakeup will be possible.

2 Responses to “Pay By Touch and pin-based debit”

  1. JBF Says:

    Will there be a biometric signature required before “qualifying” for the ability to enter a PIN? That would be a PBT Doubly Encrypted Biometric Internet Transaction (PBT DEBIT)

  2. Kenneth Mages Says:

    Check the patents by Harry Hargens on PIN Internet debit…

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