Even though the fact that the presence of a PIN has a material impact on fraud, the U.S. debit market’s reliance on signature debit continues to constrict the benefits of using a PIN at the POS. Granted, online debit transactions are still wholly signature based, but solutions are entering the market to solve for this problem.
Visa has made its position clear on this point, they don’t see a reason to put PIN front and center in an always online authorization environment like the United States, but issuers struggling with debit portfolio profitability problems might disagree. For now, knowing the right thing to do, like requiring a PIN for more transactions, isn’t the same as doing something about it.
Based on per-unit fraud losses of credit and debit cards, financial institutions have significantly more exposure to fraud losses from card payments with signature authentication than from those with PIN authentication.