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Encouraging Debit Card Use in Pakistan

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From a Pakistani banker: How might we make our customers use their ATM cards more frequently as debit cards?

I confess ignorance of Pakistani cultural values that may encourage or discourage the use of debit cards. I presume that your bank would not have decided to offer the convenience of debit cards if the business case for this product were not positive.

As with credit cards, one of the primary bases for successful implementation of debit cards is a wide and diverse merchant community accepting the card for purchases, and a reliable network supporting the transactions. Of major significance has been the fact the we use our credit card networks (MasterCard and Visa) as vehicles for debit card acceptance. That immediately includes millions of merchant locations around the world.

As debit cards were introduced in the United States, banks often touted the convenience of paying with plastic, avoiding the inconvenience of paying by check (identification, reluctance of many merchants to accept checks, etc.). We emphasized the safety of not having to carry large amounts of cash when away from home, yet being able to pay without resorting to a credit card.

Most banks began by pricing debit card transactions favorably, and, in the case of PIN-based debit, offering cash-back as part of the same transaction, avoiding the need to locate/visit an ATM.

Again, my ignorance of Pakistani banking is significant, so I don't know if you are able to use your MasterCard credit card affiliation to issue signature-based MasterCard debit cards in your country. Some in the U.S. argue that MasterCard and Visa will have to evolve their U.S. systems into PIN-based to address fraud issues; it may be that avoiding signature-based debit will be wise for your bank.

Trying to impose our experience on the Pakistani environment is difficult at best, and perhaps ill-advised. We do, however, wish you success.

First published on 10/18/04

First published on 10/18/2004

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