Nonetheless, while many people are comfortable using debit cards for in-person transactions, some are leery of using debit cards on the Internet, said Ann Schmitt, a director of Boston financial services consultant Dove Consulting Group. But those protections are voluntary, said Ed Mierzwinski, director of the U.S. Public Interest Research Group Consumer Program. Also, under law, banks are not required to investigate online purchases that never arrived, as they are with credit cards, he said. Visa, the bank-owned organization that brands most U.S. debit cards, acknowledges that its fraud policies go beyond legal requirements, but says those policies will not go away. Banks very much want their customers to move toward debit-card transactions, which cost less to process than checks and generate fee income from merchants.
Banks pitch the cards as a more convenient way for customers to handle purchases.
Early on, banks gave merchants incentives to install debit-card swiping machines near their registers. The cards save merchants the cost and trouble of handling cash and processing checks, including the nuisance of bounced checks. Still, in recent years merchants have begun to protest the fees they pay for debit-card transactions, just as they have griped for decades about credit card transaction fees. Visa processing costs more partly because the chance of fraud is higher when the cardholder does not have to verify the PIN code, Green said. In another effort to push debit cards, many banks issue them instead of plain vanilla ATM cards these days, hoping that once the card is in customers' hands, they will try it.