ATM card use at retail locations ending in March?

[ron_newman]

Eastern Bank sent me a letter telling me that "In order for us to be compliant with new federal regulations, you will no longer be able to use your ATM card ending in [...] to make purchases using your Personal Identification Number (PIN) at locations, such as supermarkets, gas stations, or other retail stores effective March 21, 2012."

The letter goes on to say that the bank is replacing my ATM card with a Debit MasterCard which will allow me to continue making such purchases. I can decline the offer by February 17 and keep my ATM card, but then I can no longer use it to make purchases after March 21.

Anyone know more about this? Has any other bank sent out similar letters?

Comments

[ron_newman]

Just to be clear - what I have now is an Eastern Bank ATM card with no Visa or MasterCard logo on it. I've been able to use it at Pemberton Farms, Farmer's Bounty, CVS, Rite Aid, Shaw's, Market Basket, the MBTA's Charlie machines, and probably other places I'm forgetting at the moment.

The letter says that if I keep the ATM card instead of trading it in for a Debit MasterCard, I can no longer use it at these places after March 21.

[dphilli1.livejournal.com]

I bet its bogus. but I have no real info one way or the other.

[rmd.livejournal.com]

That sounds like they're doing away with atm point of sale functionality (rather than risk the ire of the world by applying a fee for the transactions, like BoA tried to do and then recanted) and replacing it with the mastercard functionality. Important question is whether the debit mastercard will let you get cash back on a transaction, and whether it shows up as a cash advance from mastercard or as a plain old withdrawal.

Doing away with that ATM point of sale functionality gets around the problem of people (like me) buying a pack of gum for $1.00 and getting $50 cash back rather than pay a $2.00 ATM fee to withdraw $50.

[steeks99.livejournal.com]

But you can still do that with PIN purchases on a debit Visa/Mastercard. Just buy your gum, punch in your PIN, and get cash back. At least that's what BofA lets me do.

[rmd.livejournal.com]

Right - I'm wondering if the transaction on the Eastern mastercard debit card ends up looking like a straight withdrawal or whether it's some kind of cash advance via mastercard. I believe the behavior and potential fees/penalties - particularly in the case of insufficient funds - are very different for the two kinds of transaction.

[misterthorn.livejournal.com]

This sounds like it might be related to the Electronic Fund Transfer Act which requires banks to cover POS overdrafts without charging you a fee for that overdraft if you haven't explicitly opted in for those overdraft fees. Making your ATM a credit card probably either skirts the rule or shifts administrative overhead to the credit card product.

[ron_newman]

Why would the bank be required to cover my overdraft instead of just rejecting my transaction at the point of sale? (I'd rather get rejected anyway)

[chanaleh.livejournal.com]

They do, though. Credit cards do (and then charge you "overlimit fees"), and banks do (at ATMs, say, and then charge you "overdraft fees"). I am with you: they should just reject the charge! But no.

I would add "then what's the point of having instant computerized validation?", but I think nowadays there's a more significant problem of actual validation of the card, as opposed to the account balance. :-}

[lac.livejournal.com]

If you make a purchase with cash back, it just shows up as a regular sale as far as Eastern is concerned. I'm pretty sure. So, if I buy $20 in groceries but want to get $10 so I can take a cab...it shows up as a $30 sale, I believe.

I am trying to remember as I haven't done it in awhile. I never remember it showing up as a cash advance.

[yagagriswold.livejournal.com]

This is certainly my experience using an Eastern Bank card with a Mastercard/Visa logo. I can use it at ATMs, and to make purchases, either by using my PIN or by treating it like a credit card and signing a slip. In any case, it simply deducts the money from my checking account.

I don't recall when they switched me over to a card with a Mastercard/Visa logo, but it was some time ago.

Ron, is there any reason why you object to having the Mastercard logo on your card?

[ron_newman]

I don't especially object to it, but I've never signed up for it in the past when it's been offered to me (by Eastern or Wainwright or, for that matter Fleet or BayBank). It seems dangerous for someone to have the ability to drain my bank account just by knowing my card number.

[elements.livejournal.com]

Ron, perhaps then you should try setting up a separate small-balance checking account? Then you can have an atm/debit card for that one? And you could keep just an ATM card, with no POS purchase functionality, for your primary checking?

Or, use a credit card for purchases and not a debit card?

I think only people who still have ATM cards without a debit functionality are being affected by this change.

[notnatalie.livejournal.com]

I also have an Eastern Bank ATM-only card and I didn't get any such letter that I can tell, unless I misplaced it. I only use it at ATMs, though, so it doesn't affect me. Also, it was a switch-over from Wainwright (where I also had ATM-only). I do have to say that apparently they are not much issued, both Wainwright and Eastern tellers sometimes seemed taken aback to see such a plain card when I had occasion to use it with them.-
I just didn't want yet one more credit card-like entity on my credit report, that I would have no use for, thinking the simpler the better.

[ron_newman]

The letter went only to people who "have used this ATM Card to make these types of purchases in the past".

If you have never used your ATM card that way, you won't get this letter and presumably your card will not be replaced with a Debit MasterCard.

[koshmom.livejournal.com]

I have a sovereign atm-only card and got no such letter. But often I get my mail late, so wait a few days and I'll keep an eye out for such a letter.

[ron_newman]

Do you use your Sovereign ATM-only card for retail purchases? If you don't, you may never get such a letter.

[koshmom.livejournal.com]

I use it almost exclusively for the supermarket. It's essentially the only way I ever get cash. The actual bank is annoyingly located for me to go there to remove cash, and I don't watn to pay ATM fees.

[boblothrope.livejournal.com]

Which ATM network are the store purchases going through?

[ron_newman]

I don't know what that question even means, or how I'd find out the answer. I use the ATM card, I enter my PIN, the money comes out of my checking account, it just works.

[laryu.livejournal.com]

It should say on the back of your card, like Cirrus or NYCE or one of those networks. I'm sure the change has to do with the limits to interchange fees as part of Dodd Frank (and the Durbin Amendment), which are changing the economics of clearing debit card purchases. Eastern's participation in whatever network it was part of probably became more expensive than switching to the MC network.

[ron_newman]

The back of my Eastern Bank ATM card has both Cirrus and NYCE logos.

[perspicuity.livejournal.com]

my bank desperately tried to foist a dual credit/atm card on me "you can use it for both!"

and i said "no"

and then they tried it again. and again. changing the offer to "how about just a credit card?"

see? i think they are just trying to trick me into a monthly balance, which they make money off of. interest. fees. late payments. oh yeah, good times.

the don't make money from atm 'cash' transactions, and probably lose some to boot.

i had to go intro a branch, and opt out of such offers manually, and forever. "seriously, I NEVER WANT TO BE OFFERED THIS CHOICE AGAIN, CLEAR?"...

but really, i'd prefer 5-16 digit PINs too :)

#

[ron_newman]

this is still a debit card, not a credit card.

[perspicuity.livejournal.com]

yes, exactly. atm/debit. my bank desperately wanted me to have a credit card instead of a debit "cash" transaction. i told them "hell no".

#

[thetathx1138.livejournal.com]

Worth noting is that banks, especially the big 'uns, are going to press hard on this point: the retail industry successfully capped swipe fees for debit cards, but not credit cards.

[andy1818.livejournal.com]

Hey folks,

Andy from Eastern Bank's PR Department here....I think I can clear up some of the confusion:

One of the provisions of the Durbin Amendment is a prohibition on network exclusivity. This means that for any card that allows point of sale purchases, we must provide merchants with at least two networks choices to process the transaction.

For our debit cards, we partner with NYCE and MasterCard to process our transactions, however for our ATM cards NYCE is our only network. As a result, we are removing the ability to do PIN point of sale transactions from our ATM cards and offering to upgrade customers who have used their ATM to make purchases to a debit card. The debit card will still allow customers to make PIN point of sale purchases (and to get cash back) and will give customers the added ability to use their card at merchants who don’t have PIN terminals.

Thanks!
Andy

[ron_newman]

Thanks. When I look at the back of my Eastern Bank ATM card, I see two network logos - NYCE and Cirrus.

[andy1818.livejournal.com]

Ron,

Cirrus is MasterCard's ATM network. That network allows our customers to make ATM withdrawals at Cirrus ATM terminals. The only network we have available for PIN purchases at a merchant is NYCE.

Thanks,
Andy

[ron_newman]

Thanks again. Is the requirement for two networks just for redundancy, in case one of them fails or temporarily goes down for maintenance?

[andy1818.livejournal.com]

Ron,

It's my understanding that merchants wanted two networks so that they could choose the lower cost option.

Thanks,
Andy

[siderea]

Huh. This is fascinating. I really appreciate your commenting here to fill us in! Thanks!

[andy1818.livejournal.com]

Absolutely, anytime. I also manage Eastern Bank’s Facebook page, so if you ever have a question, please feel free to post it to our Wall.

http://www.facebook.com/easternbank

Have a great weekend!

-Andy