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LATHAM , N.Y. – The New York Credit Union League has offered its member credit unions access to flyers which, it says, will help them retain more of the members validating their debit transactions with their signatures. Signature validated debit transactions still bring more interchange than debit transactions involving a personal identification number. As part of their recent settlement with retailers VISA and MasterCard cut the interchange rate on debit transactions cardholders validate with a signature. They also rescinded their previous rule forcing merchants to accept their debit card for signature transactions. With that rule gone, it appears an unknown number of merchants might start declining to accept the cards or do so only for transaction in which a cardholder uses a PIN. The League’s Card Services program will print VISA and MasterCard versions of guidelines for credit unions to distribute to distribute to their members. The inserts are free of charge to credit unions that are on the Card Services program. “It’s imperative for credit unions to order these free materials, and get them in the hands of their members,” said Kimberly McCumber, Assistant Vice President of Card Services. “These changes are complicated, and it’s vital to your credit union’s debit card program to help avoid member confusion. That’s why we’re offering inserts at no charge.” McCumber acknowledged that the League had not received reports from members about drops in their debit interchange because of merchant practices, but that the League had thought it important to be out front on the issue. Many different industry experts have weighed in with opinions about what merchants might do once they were no longer required to accept MasterCard or VISA’s signature debit product with the majority expecting that merchants will keep accepting them but will instead try to subtly direct cardholders toward using their personal identification numbers. So far, with the exception of Wal-Mart’s decision to no longer accept MasterCard debit card for signature transactions, there has been little evidence of a sector wide change in behavior. McCumber said credit unions will also try to counter any merchant direction to PIN by pointing out to cardholders that they retain their rights to VISA and MasterCard’s procedures for disputing transactions as long as they sign their receipts. “We remind them those protections will be lost if they use a PIN,” she added.

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