Debit Network’s Second Act

As the payment industry has evolved over the last several years, debit payment networks have likewise changed shape, moving away from being simply PIN-based regional systems into more fluid and expansive networks, growing to incorporate new uses for elements such as tokenization. In a discussion with PYMNTS, Carol Specogna, Vice President of the Accel Network for Card Services at Fiserv, shared her thoughts on the evolution of the payments industry, the key role EFT networks play in emerging technology, where tokenization is headed, and her company’s leading role.

What differentiates Accel from other payment networks?

CS:  Accel’s consumer focus and tight integration with Fiserv solutions help our clients penetrate emerging markets and boost their performance. As consumers and small businesses increasingly rely on emerging technology to conduct transactions, Accel clients are advantageously positioned to be the single source for all their consumers’ payment needs. Having a provider that’s a market leader – and one that can navigate the complexities of the industry to deliver integrated solutions – is a definite plus for issuers.

There are many examples where Accel is a component of those solutions, including things like EMV, tokenization, real-time debit rails for the Popmoney product, or, even more simply, an integrated approach with the Fiserv core or Fiserv card services for debit processing. Through this integration, we can make the deployment of these initiatives considerably less painful and more efficient for our clients.

Another differentiator is that we can tailor our solutions to maximize revenue generation for clients of all sizes. Obviously, we have a regulated interchange program to meet the needs of the largest issuers, and then we have multiple exempt programs, including a unique zero-switch-fee program for very small issuers. That’s to help those small banks and credit unions deal with managing their costs. So we really look at the market and customer needs to determine how to adjust the programs on an ongoing basis.

Finally, we support a full suite of debit payment transactions – and that’s both PIN’d and non-PIN’d, to ensure our FIs are top-of-wallet regardless of how and when the consumer chooses to transact. We expect to continue expanding that transaction set to help our issuer members continue to meet consumer demand and preferences in the long term.

In the past, people have considered networks like Accel as regional PIN networks. Could you tell us how that has changed over time?

CS:  There’s been a definite evolution in the industry over the last several years. In the past, there was a clear delineation between PIN-based networks, such as Accel, and the bank association debit brands that support signature. And that’s been changing over time.

In the last few years, we’ve seen the major signature brands mandate PIN-based transactions. They did so in slightly different manners, but the end result has essentially been the same, which is more PIN transactions through those brands.

On the other side, Accel has been expanding its PINless transaction set of consumer capabilities. We actually started this in 2002 with the introduction of PINless bill payment. More recently, we’ve introduced eCommerce; the money transfer transaction, which supports person-to-person payments; the Accel No PIN transaction, which supports $50 and less swipe-and-go at participating merchants; and we’re further expanding this fall to what we call Accel No PIN Plus, which pertains to signature-based transactions of all ticket sizes. What this translates to is offering our FIs a choice and control in routing more and more transactions to support the best economic model for the issuer.

Accel’s definitely more than a regional PIN network; that changed many years ago. We have cardholders in every state; we have acceptance across the nation; and we have a full suite of debit payment transactions. We’ll continue to expand that network offering to address market needs while adding value to our membership base.

Accel was one of the first debit payment networks to accept tokenized transactions through Apple Pay. Do you believe that there should be a standard approach to tokenization?

CS:  As I mentioned previously, being a product offering of Fiserv has its definite benefits, and Apple Pay is a great example of this. Since Fiserv was engaged in discussions early on, the Accel Network was able to support this quickly following the announcement. And the integration with our Fiserv card services debit processing environment helps issuers deploy the solution as efficiently and quickly as possible.

Regarding your question specifically about a standard approach, I first want to mention that Apple Pay is just one example of a mobile application that’s utilizing the concept of tokenization. Its vast consumer following was a definite factor in pushing the industry players to make changes to support tokenized transactions; it wouldn’t have happened as quickly as it did without this widely known consumer brand pushing for adoption.

But I view Apple Pay as a consumer-friendly front end solution. It still uses our debit rails, which have been in existence for decades, but it makes the purchase easier for consumers to complete and, to a certain extent, more secure. From a standardization perspective, anyone that wants to create a consumer-friendly front end solution can also take advantage of the tokenization support that’s been built out in the debit payments industry.

And that’s just one approach to tokenization, which really can take other forms. As long as we’re supporting the transaction on the debit rails and we’re not requiring significant changes on either the acquiring or issuing side, and we use a pseudo card number, it can be considered tokenization.

For example, what I mean by that is: if I could go create a 16-digit, one-time use card number that’s valid for only one purchase, that would be considered a token since it’s not the real card number being used, and obviously there’s some innate security there.

Overall, I think we’re going to see more uses of tokenization in certain channels in the near future, because of the security involved. And it’s going to really be more about the front end experience for consumers.

What’s next for Accel? What do you have in the works that you can share with us?

CS:  Maybe I hinted at it a little bit with my last response. We’re in the midst of a pilot using the concept of tokenization for card-free access to cash. We’re working with a few Accel issuer members, and we’ve enabled a limited number of ATMs across the country with functionality that essentially allows the consumer to withdraw cash at an ATM without a physical card.

This solution is Accel creating the token and de-tokenizing it, and the issuer platforms can handle the withdrawals in the same manner they do today. This means that FIs will be in a position to support this new capability without having to undergo extensive core development, which translates to a faster time-to-market. Accel is enabling the functionality on ATMs across the nation; we’re building out the network. If banks and credit unions want their ATMs to participate, they can, but it won’t be a requirement. Whether an FI is an Accel member or not, any card-free cash withdrawal will route through Accel for authorization and approval.

Just to put things into context: the first use case that we’re piloting is emergency cash, which can help consumers when they’ve lost their card, or it’s been stolen or compromised. When you think about all of the breaches that we’ve seen and the millions of cards that are affected, this really impacts consumers in the entire industry – particularly when you think about it from a reissuance perspective. So this solution can provide consumers with access to cash immediately, as they wait for a physical card to be reissued.

And we’re looking at other use cases, too. This could be anything from general convenience to generating the token for a level of security to conduct those transactions.

We will be running our pilot test for several months, but it’s really exciting to be working with solutions that meet the diverse needs of consumers and how we enhance their lives leveraging tokenization concepts to solve everyday issues. We’re super excited about its potential.

It sounds like you guys have some exciting stuff in the works, and the industry has something to look forward to in that regard.

CS:  It is an exciting time for debit payments, and we’re really excited about this tokenization concept. Most importantly, we are crafting solutions to ensure our clients’ cards are at the top-of-wallet for any transaction, in any scenario. Strengthening loyalty and expanding consumer-to-FI relationships is a key focus for us.

Carol Specogna

Vice President of the Accel Network for Card Services at Fiserv

Carol Specogna is Vice President of the Accel Network for Card Services at Fiserv, with responsibility for driving transaction growth and cardholder satisfaction for one of North America’s premier debit payments networks. Prior to joining Fiserv, she worked at EDS and KeyBank.  Carol received her Bachelor of Commerce degree in Finance from the University of British Columbia, earned her MBA from Case Western Reserve University, and holds a Graduate Certificate in Applied Statistics from Penn State University.