Shazam debit network will introduce a product that will let merchants accept PIN debit transactions on smart phones later this year.
Debit network companies are exploring ways to introduce PIN debit into more environments as new federal regulations limit debit interchange fees and reforming transaction routing options.
Shazam’s new product was developed by the Fort Lauderdale, Fla.-based authentication-technology vendor Adaptive Payments, DigitalTransactions.net reports. It will allow merchants with properly equipped iPhones to offer consumers the option of paying with a credit card or with a signature or PIN-based debit card.
The product will be the first time the PIN option will be available on a mobile device. Instead of entering a PIN number on a merchant’s device, consumers will swipe their card through a cradle attached to the merchant’s phone and then enter their PIN on their own mobile phone.
The product also includes a mag-stripe swipe device that encrypts transactions at the read head using the Triple-DES protocol, according to DigitalTransactions.net.
Shazam plans on releasing a version for Android-powered phones soon after it rolls out its iPhone technology.
The company remains in discussions with networks and banks about using the service. Both banks and merchants are have expressed willingness to accept PIN debit on mobile devices because it decreases the risk of fraud.
Shazam also recently announced that is testing dual-message PIN debit as well, which it plans on officially introducing next year.