August 30, 2011

The SHAZAM Network announced the creation of a dual-message PIN product, in what it called a first for the electronic funds transfer industry. The network also plans to expand its support of EMV, the chip card standard. (EMV stands for Europay, MasterCard, Visa.)

The product will use a dual-message transaction with separate authorization and settlement messages for PIN-based transactions, a capability previously only available on signature-based transactions.

With dual messaging, the transaction is authorized either offline or online and the transaction is stored in the payment terminal’s temporary storage. At a predetermined point in time—such as after a specific number of transactions or during the daily closing—the data is either routed directly to the acquirer or to the point-of-sale management system, according to a definition by Six Card Solutions.

“The SHAZAM network was a pioneer with single message PIN transactions and will now become a pioneer again by supporting dual message PIN transactions,” said Michael Hollinger, SHAZAM president and CEO.

This support for both single and dual-message PIN products will allow SHAZAM debit cardholders to make PIN-based purchases at more online retailers than before. In addition to e-commerce, the dual-message PIN product will be useful at brick-and-mortar merchants that accept signature debit transactions, like restaurants, car rental companies, and hotels.

“Our financial institution participants understand the importance of increasing PIN debit transactions in a post-Durbin world,” said Hollinger. “SHAZAM will be enhancing PIN processing though support of EMV chip and PIN technology and the dual-message PIN system technology. This will give debit cardholders more options, more security, and overall, more reasons to choose their SHAZAM card over any in their wallet.”

The solution provides the SHAZAM PIN debit brand as an alternative that will lessen the cost and effort required to support the Durbin Amendment for merchants and financial institutions, enabling them to integrate network routing alternatives allowed by the Federal Reserve’s final rules.

SHAZAM acquirers can send SHAZAM transactions using the standard dual-message processing logic they use today with the added security of a PIN in the authorization message. SHAZAM’s processing system will be used to track the number of completions to the original authorization to prevent the cardholder or merchant from posting more than the original approved authorization.

The dual-message PIN transactions will be considered PIN transactions for routing purposes and will follow SHAZAM operating rules. Interchange rates for the dual-message transactions have not been set.