Senator Richard Durbin (D-IL) of Durbin Amendment fame has asked the Federal Reserve Board of Governors to determine if financial institutions that have not adopted PINless debit are inhibiting merchants’ choice of debit networks, particularly for e-commerce transactions, and thus violating Regulation II.

A change or clarification to Regulation II that requires financial institutions issue cards with PINless capabilities through the EFT debit networks could help some merchants to lower their e-commerce processing costs, but they will need to change their routing routines and be aware that these PINless transactions come with chargebacks. The real winners in this scenario are the EFT debit networks themselves.