he radio ad entices listeners by posing a question to inspire daydreams: "What would you do with $100 a day for a year?" We all can think of a lot of ways to put extra money like that to use, and the responses in the ad include all sorts of ways to spend it.

This isn't an ad for a lottery, but for a sweepstakes sponsored by Visa. In the ad, the announcer goes on to say that every time consumers use their Visa-branded check cards, they're automatically entered to win. The catch is that to be eligible to win, they have to sign for the purchases, not use a PIN number, to authorize the transaction.

According to the official sweepstakes rules for "Visa Everyday Dreams" posted on the company's Web site, all transactions paid for with signature-based Visa check cards between September 1 and October 31, 2003 will establish eligibility. An entry is issued every time the check card is used for shopping for groceries or clothes, filling the gas tank, paying bills or making purchases via the telephone or Internet.

PIN-based purchases and ATM transactions - in other words, those processed over regional networks - do not qualify. Only purchases made with a Visa check card in good standing, issued in the U.S. by a participating financial institution and processed through Visa USA's transaction-processing system, are eligible for automatic entry. Cash withdrawals, balance transfers, non-U.S.-dollar purchases and Interlink-processed transactions also are excluded from entry.

Online debit doesn't count, so forget the PIN and don't leave home without your offline debit check card.

This is not only a potential reward for a lucky customer who selects the signature-based way to use debit, it's the more profitable option for Visa. It's also at the center of controversy brought to light in the "honor all cards" antitrust lawsuit, in which Wal-Mart and nearly four million retailers challenged Visa and MasterCard over debit card fees.

Is it a coincidence that this particular sweepstakes is happening now?

There are a number of factors coming in to play all at once in the debit market, and what result these events will have on the way banks issue debit cards and merchants accept them remains to be seen.

The fallout from settlement terms of the retailers' class-action suit against the two associations will be broad and will impact everyone involved in processing debit and credit transactions - banks, associations, merchants and consumers - from several directions.

For Merchant Level Salespeople, depending on which market segment you target, it may affect the products you sell and to whom you sell them. Understanding the differences within the market has never been more important. Convenience stores and QSRs are two big growth areas for debit, but the average ticket price for either is around $10. Why should they bother accepting the more expensive signature debit?

Among the occurrences in flux:

• Interchange fees for signature (offline) debit transactions have been reduced by one-third as of August 1, 2003; after January 1, 2004, Visa and MasterCard will negotiate with merchants to set new fees and then will notify their member card-issuing banks what they will be paid. TCF Financial Corp., whose debit card operation is the 11th-largest Visa program, is the only bank thus far to publicly protest this process, calling it price fixing. It stands to lose considerable revenue and wants to be included in the negotiations.

• MasterCard already has introduced the updated identifier design on debit cards from its issuers. As part of the settlement, debit card issuers are required to adopt and implement new design standards to make it easier to tell a debit card from a credit card beginning January 1, 2004; all debit cards must be completely reissued (at the expense of the issuer) and incorporate a distinctive identifier by January 1, 2007. The new Debit MasterCard Hologram features the word "debit" within the MasterCard Identification Area.

• Visa and MasterCard will pay Wal-Mart and the other retailers $3 billion under terms of the settlement. How it will be paid and who will actually pay it have not yet been determined.

U.S. Bank, the nations' fifth-largest Visa debit issuer, is reducing the cash rebate amount it has paid its customers through its "Checking That Pays" program. Debit card transactions that have paid $1 per $100 spent will now pay only a flat 0.25 percent or 25 cents per $100.

Fifth Third Bank also has stopped marketing similar programs. Signature-based transactions have generated much higher fees - and higher revenues for issuers - than PIN-based transactions, and up to now those fees have funded rewards programs, such as cash back or redeemable points.

As part of the summary judgment, the card associations agreed to several settlement contingencies, including lowering interchange rates for both offline (signature) and online (PIN-based) debit transactions. Beginning in 2004, merchants will not have to "honor all cards" and accept signature-based Visa or MasterCard debit transactions, for which they pay an average of 99 cents to $1.01 per $100 transaction.

Since the settlement, Visa USA has issued several statements regarding its commitment to providing consumers and merchants with the greatest number of payment options. According to a statement on the company Web site, there are 120 million Visa check card holders making more than 25 million transactions a day in five million locations in the United States. Sixty percent of U.S. consumer payments are made with cash or checks, totalling $4.8 trillion annually.

Visa says it is the debit leader; debit accounts for 51% of the $1 trillion worth of transactions it processes and 30% of its sales volume, according to Visa USA president and CEO Carl F. Pascarella. "We're no longer a credit card company, we're an electronic payments company. What we're looking for is less cash and less checks," he told the Associate Press in an interview.

MasterCard also has set its sights on getting consumers to migrate from using cash and checks to debit for purchases in all areas. In an interview with the Associated Press, Ruth Ann Marshall, President of MasterCard International's North American Division, said her company leads in the credit arena, with 315 million cards issued in the U.S. compared to Visa's 263 million. Marshall said that debit growth is 2 1/2 times that of credit and that the real competition lies in cash and checks.

U.S. District Court Judge John Gleeson is expected to approve final terms of the summary judgment in the retailers' class-action suit against Visa and MasterCard on September 25, 2003. The debit dust won't settle completely until long after that.