Visa has revised its US operating regulations to expand the conditions under which non-Visa debit transactions can be processed without PIN validation on Visa-branded debit cards, starting 1 July 2008. Visa now allows for consumers to use Visa debit cards for smaller purchases without entering a personal identification number.

The company has rescinded the rule that required merchants to treat Visa-branded debit cards differently when used as a PIN-debit card (and processed via non-Visa networks) from the same cards when used as signature debit cards and processed on the Visa network.

The initiative was adopted in response to inquiries by the Department of Justice. The Department had been investigating whether the rule affected competition in the debit card industry by restricting certain PIN debit transactions, especially small-value and internet transactions, and by interfering with the introduction of new types of PIN debit services.

Visa has allowed banks to permit some merchants to waive the signature requirement for certain signature debit transactions, including "small ticket" transactions of USD 25 or less and some transactions over internet. Waiving signature authentication for these transactions has benefited merchants and consumers by reducing transaction time at the point of sale, the Department of Justice claims.

While allowing for signature waiver, the Visa operating regulation the Department had put under investigation had prevented banks from allowing merchants to waive entry of a PIN for most non-Visa debit transactions initiated from Visa-branded debit cards. Visa's new regulations adopted in response to the Department's investigation allow banks to provide merchants the option of waiving the entry of a PIN. Visa has also amended its operating regulations to require that banks notify their cardholders that transactions not authenticated by a PIN or a signature might be processed via a PIN-debit network and not by Visa.

The Department's Antitrust Division will close its investigation now that Visa has adopted the new regulations.