PIN No Longer Needed for Debit Charges
WASHINGTON (July 1) - Consumers can now use Visa debit cards for smaller purchases without entering a personal identification number, the same way they can skip signing receipts.
Paul Sakuma, AP
Visa said Tuesday it is no longer requiring merchants to treat its debit cards differently when customers use them as PIN-debit cards, as opposed to signature cards.
The move prompted the Justice Department to drop an antitrust investigation of the practice.
Visa has allowed banks to permit merchants to waive the signature requirement when customers use Visa debit cards, usually on small purchases below $25, the department said. But Visa has prohibited banks from allowing merchants to waive the entry of a PIN if a customer chooses that route.
Visa said it is ending the prohibition on waiving PINs effective Tuesday.
When a customer uses the debit card as a signature card, the transaction is processed over Visa's network, but if the customer uses a PIN with the same card, it is processed over a separate network.
The signature waiver has reduced transaction processing time, the department said, potentially giving Visa's signature network an unfair advantage over PIN networks.
"Visa's amended operating regulations overcame the competitive concerns that prompted our investigation," said Thomas Barnett, assistant attorney general in charge of the Justice Department's antitrust division.
Visa believed its previous rule was "fair and competitive," but the company said it was "pleased" to have resolved the regulatory concerns.
Attorneys general in New York, Ohio and Washington, D.C., also had looked into the practice and have ended their investigations, Visa said.
Shares of San Francisco-based Visa dropped $1.20 to $80.11 in afternoon trading.
AP Business Writer Stephen Bernard in New York City contributed to this report.