CO-OP Network to offer SafeDebit for enhanced security with e-commerce

ONTARIO, Calif. - E-commerce has taken the credit union industry by storm over the last few years. The CO-OP Network wants to help CUs make sure their members are safe when shopping online. CO-OP Network will soon be able to help credit unions offer their members a more secure way to make purchases over the Web using a debit card product that incorporates a physical presence into the traditional PIN-based debit transaction. CO-OP Network will begin offering NYCE's recently unveiled SafeDebit product to its 600 CO-OP Network CUs. Bob Rose, president and CEO of CO-OP Network, said there were two driving forces for bringing SafeDebit to credit unions. "For us it's another transaction that flows through our system. We don't process credit card transactions. We just process debit transactions, so it helps us build volume which in turn helps our credit union owners because the money flows down to them," said Rose. CO-OP Network earns between three-and-a-half to five cents on all debit card transactions, depending on the switching fees in a particular region. The other reason is security. "There will be other payment methods, but this is a very safe way to transact business over the Net right now," said Rose. Developed by NYCE, SafeDebit is the first PIN-based debit card for e-commerce that features a physical presence. Users are required to insert a small card disk into their computer each time they want to make a purchase over the Net. Participating credit unions will issue their members a SafeDebit CD-ROM card disk, which is shaped like an ATM/debit card (it even fits in wallets), along with a PIN. When making an Internet purchase, cardholders will select SafeDebit as the payment option from the site they are shopping on; insert the SafeDebit card into the CD-ROM drive on their PC; and enter the unique e-PIN for authorization. The two-step process, presentation of a card and entry of a PIN, is new to the Net and is expected to proliferate in coming years as the physical presence of a CD or some other device enters the e-commerce arena. Some analysts predict USB keys will be a popular physical tool in the future, and many believe some level of biometrics will be incorporated to further secure the transaction. SafeDebit can only be used at sites where the company has agreed to accept SafeDebit payments. Wal-Mart was one of the first major retail chains to accept SafeDebit purchases. As with any ATM/debit transaction, the SafeDebit transaction will be routed through the designated online EFT network. CO-OP Network is currently the country's largest credit union network and sixth largest EFT network with 3,750 ATMs in 32 states. CO-OP Network is wholly owned by credit unions. The network averages 30 million transactions a month. -pgentile@cutimes.com