You have seen the headlines – debit transactions are continuingto grow exponentially. Consumers are shifting away from cash andchecks, and plastic users are becoming more prudent with theirspending, choosing debit's “pay now” promise over credit's “paylater.”

Yet as debit use increases, so too does the risk of fraud withinyour credit union's debit portfolio.

Couple consumer confusion over the Durbin amendment with therecent announcements from large banks instituting checking anddebit card fees, and it's easy to see why your members might belooking for guidance where their everyday financial transactionsare concerned.

Now is the perfect time to point them in the right direction –and that is toward the use of PIN whenever possible.

A relationship built on trust

At the heart of the credit union-member relationship is trust.Members trust that their credit union will vet all of the channelsthrough which their money is routed, creating a safe and securetransaction every time.

They trust that their hard-earned dollars and the instrumentsthey use to access and move those dollars – whether online, ontheir smartphone, or with their plastic debit card – are protectedevery step of the way.

In addition to operational integrity, what else can creditunions do to protect their member relationship? Encouraging membersto use their PIN whenever possible protects both their money andtheir identities.

There are two major reasons for credit unions to encouragePIN-debit transactions whenever possible. One, with the anticipateddecrease in debit interchange (eventually even for exempt issuers),increasing debit transactions should be on the top of every creditunion's list.

Second, PIN usage lowers the fraud risk for everyone involved –the card issuer, the merchant and the member.

Whenever possible

You have seen the reference to PIN “whenever possible” a coupleof times in this article. That is because PIN support is notavailable everywhere today, such as online and in mobiletransactions.

However, new technology is developing rapidly, and your creditunion needs to be aware of how emerging solutions are making iteasier for your debit cardholders to make PIN purchases in moreplaces – so that you can encourage this type of purchasebehavior.

More online merchants are supporting PIN transactions todaybecause they understand the potential savings the technologyoffers.

According to SHAZAM's chargeback data, online merchants reportan average of 8% of their online signature-debit transactions asfraud. Within PIN-debit transactions, only one-tenth of 1% percentof all transactions is categorized as fraud.

While merchants are reimbursed for fraudulent transactions, theymust devote a significant amount of time to the process. Therefore,a strong motivation to limit fraud does exist within thiscommunity.

As well, debit card-issuing credit unions stand to benefit froman increased use of PIN for online purchases. Among these benefitsare fewer chargebacks, less energy devoted to fraud settlement, anda greater reputation for protection among cardholders.

For your debit cardholder members, the benefits of online PINtransactions are equally as plentiful. PIN's increased securitymeans less exposure to the hassles of waiting for a compromisedcard to be replaced or reconciling fraud transactions with theircredit union.

New technology also allows mobile merchants to accept PIN-basedtransactions with an iPhone. Beyond the added security, thesetechnologies enable consumers to purchase goods wherever they arewith existing funds rather than tap their credit accounts.

Train your team, protect your relationships

Decreased fraud, safer transactions and stronger memberrelationships – these are all reasons your credit union mustunderstand – and encourage – PIN transactions.

When your members use PIN whenever possible, no matter whatplatform they are using, it lowers the risk for everyoneinvolved.

Dan Kramer is seniorvice president of marketing and merchant services for SHAZAM in DesMoines, Iowa.