MasterCard joins Visa in pushing PINs into America

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To pin, or not to pin, that is the question...

Yes, there are some sorts of cards that work as both debit cards (requiring a pin), or as a credit card (needing a signature). While the cost to the consumer is the same in both instances, and the money comes from the same account (a demand deposit account or checking account), the difference to the merchant is quite a bit.

You see cards that are treated as "credit" cards (signature) get a discount fee (around 3%). Cards that are treated as "debit" cards (PINs) are charged a fixed fee (no more than $0.25, after a silly bill passed in congress a while ago). So, if you have a bill over $8.33 (or so) the merchant gets nicked for more. In addition, you can't get cash back from ANY credit card (signature) transaction.

Nicely for consumers, there ARE benefits for having a credit card, like the bank paying you 1% more more on each transaction (they still make $$$ by charging 3% to the merchant).

This "signature" stuff goes back to when the signed chits were returned back to the consumer (back before the 70's).

For the curious, the original slips that were signed were the size of either 51 or 80 column IBM punch cards, and when returned back actually had holes in them.

As for me: Signatures are enough, pins are a pain!


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