Dan Fisher

With over 35 years in the financial industry, Dan M. Fisher has proven himself as a leader in the financial industry holding roles as the former director of the Federal Reserve Bank of Minneapolis and former Chairman of the ABA Payment Committee.

Is there a safe way to use your Debit Card amidst COVID-19?

No doubt COVID-19 is on the top of everyone’s mind and there is a growing concern pertaining to protection and exposure.

Recently, multiple card networks have published that PINless Debit Transactions are a great way to safely avoid COVID-19. More importantly, those same card networks have even raised the PINLess Debit transaction limit to $100.00 to make the PINLess Debit transaction option more available to merchants instead of the traditional $50.00 limit we observed before the coronavirus. What percentage of card holder transactions will be subject to this new higher limit and how will this impact your profitability? The negative impact on community financial institutions during COVID that use these vendors will see their interchange income plummet.

Let’s pause for a moment and ask ourselves a simple question. Has there been any medical evidence or study has been conducted by the industry or vendor that would support the assertion PINLess Debit is safer?  I think not! Our scientific resources have better things to do. Second, to vendors that tout this safer way, I have to ask, what about the slot that the card is inserted into? How contaminated is that? Oh, does the card slot, like a car wash, bath the card in sanitizer? Does the card holder have the opportunity to sanitize their card at the point of sale? What about the purse, wallet or cell phone sleeve that the card is slipped into? C’mon Man! Give me a break! You have Got To Be Kidding! You would be better off using a cotton swab to input your PIN and sanitizing your card every time you use it. Let’s be real!

PaymentsSource.com Note: The Copper River Group believes contactless payments are secure, although the table shows that reason last.

The reality is simple. The PINLess Debit merchant transaction option is not any safer and furthermore, it takes interchange income away from the community financial institution while increasing fraud exposure.

The Safe Way
Apple wallets

During COVID-19, the safest way to offer a debit card product to your card holders is through a mobile wallet program (i.e. Apple Pay, Google, Samsung), or issuing contactless cards. The fact of the matter is simple. No-contact is the best way. Most of the newer smart phones have contactless NFC chips built-in and this capability truly is the way millennials are going. So, contact your network and set up a Mobile Wallet program immediately in addition to issuing contactless capable cards. Then, tell your card holders! Contactless, is safe, versatile, and reduces the potential exposure to COVID-19.

How Fast?

It is our suggestion that you move as fast as you can to implement a mobile wallet strategy. We would start with Apply Pay first. The iPhone is the most prolific smart phone in the world. To put it in perspective, 10% of the world population owns an iPhone. That is not to say that everyone has an iPhone X, but you stand pretty good shot on connecting with a large group of smart phone owners with an NFC chip in their phone right off the bat. A mobile wallet can be implemented in weeks, contactless cards could take you months, and in some cases, there are switch networks that don’t offer contactless at this time. That may be something you should consider when your contract comes due. Therefore, we recommend you implement a mobile wallet strategy first, and contactless cards should be next.

Be Vigilant

The sign of the times is that community financial institutions are being exploited through complicated network rules. Your greatest industry advocate, the ABA, ICBA and NCUA, are looking the other way and ignoring in regard to this type of tactic as well. The industry is distracted, and that is a weakness.

The only way to truly protect your card holders and your financial institution profitability is to remain vigilant. Review the rules, seek out competent professionals that can assist your organization, and stay informed. Your debit card portfolio is one of your most important assets and in the era of COVID-19, it’s importance and value is increasing at the speed of light. Don’t let the vendor mislead through misinformation. Do your homework – It can mean hundreds of thousands if not millions to your institution over the term of a bad deal!

Your debit card portfolio should not be costing you money. Ask us for examples or references of how we have helped our clients in savings and taking back their interchange income. Give us a call today.







Dan Fisher

With over 35 years in the financial industry, Dan M. Fisher has proven himself as a leader in the financial industry holding roles as the former director of the Federal Reserve Bank of Minneapolis and former Chairman of the ABA Payment Committee.

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The Copper River Group is a financial consulting firm that believes in the benefits technological advancement has for streamlining business.

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