WASHINGTON -- Merchants of all sizes are pushing customers who pay with a debit card to use their personal identification numbers instead of their signature, The Wall Street Journal reports. By punching in a PIN, customers save retailers billions of dollars in fees that are collected by banks and credit-card issuers. PIN transaction fees are lower than signature-based transactions.

An increasing number of merchants are encouraging shoppers to pay with PINs and other methods of payment that carry low transaction fees. While using PINs benefits retailers, consumers may lose debit-card rewards because banks rarely offer such rewards if customers use a PIN.

Large retailers such as Wal-Mart and CVS have been directing customers to PIN-debit machines for years. The practice is becoming more popular, especially in small businesses. “Lots of merchants we are talking to are installing pin pads to cut costs,” Mallory Duncan, general counsel for the National Retail Federation, told the newspaper. Duncan also is chairman of the Merchants Payments Coalition, of which NACS is a cofounding member, that is seeking a more competitive and transparent credit card fee system that better serves American consumers and merchants alike.

According to Visa USA Inc., a typical grocery store pays 24 cents in fees when a customer spends $40 and punches in a PIN for a debit-card payment. A fee of 35 cents applies when the customer signs for a debit-card transaction. The fee can jump to more than 50 cents when a shopper uses a regular credit card. The banks issuing the cards mostly pocket the fees.