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ARCO Debit Card: Transaction Fee Free Gas

November 13, 2010 Update: ARCO is no longer offering the ARCO Debit card.

A note on their web site,, reads:

At this time, we are not accepting new requests for this card or providing...replacement cards for this program.

If you don't have an ARCO Debit card already, bring cash when you visit ARCO or pay the price: 45 cents to use a credit or debit card.

If you have questions about your account, call them at 1-800-959-3349.

There are still two options for avoiding the transaction fee at ARCO when paying by card at the pump:

  • Prepaid cards: ARCO sells gift cards in $5 to $100 dominations. This isn't very practical because, quite often, you won't be able to fill your tank when the money runs out on the card.
  • Business fleet cards: If you own a business, you can apply for a fleet credit card.
Now, back to the review...


If the allure of credit card convenience for cheap ARCO gas is strong, this card may be for you. In most other respects, it is a lousy card.

The ARCO Debit MasterCard does one thing well: It avoids the 45-cent convenience fee ARCO charges to use a credit card at their gas stations.

The card is free with no annual fee. If you have shunned ARCO because they don't accept credit cards, the ARCO Debit card could win you back.

Cheap gas is about all the ARCO card is good for, though.

ARCO Debit is also a reward card but the rewards are miniscule. They employ poor security practices, like sending activated cards in the mail. It is a decidedly self-service card that requires a computer to operate.

Is the ARCO Debit MasterCard right for you? What is the reward structure and what are the caveats? What other benefits does the card offer? In what ways is their fraud protection lacking?

Find all of this and more in Knowzy's "ARCO Debit Card: Transaction Fee Free Gas"




Quick Facts

ARCO Debit MasterCard at a Glance

  • Free, most anyone qualifies
  • Use it to buy cheap ARCO gas with no credit card fees
  • Computer, Internet and Java required
  • Cash back card with minimal rewards
  • Self-service card: Many tasks require Internet
  • Poor customer care
  • Debit card with a MasterCard logo
  • Weak fraud protection, i.e. they send activated cards in mail
ARCO is Owned By BP

Yes that BP, whose oil spill in the Gulf of Mexico will impact the region for a long time to come.



What is the ARCO Debit Card?

Mareting graphic shows two ARCO Debit MasterCards- one is the Preferred card, the other is the standard ARCO card.
Marketing graphic courtesy of ARCO/BP Global.
One of These Means No ARCO Fees

Don't let ARCO penalize you for using a credit card. Get the free ARCO Debit MasterCard.

A wide angle photo of an ARCO station. ARCO and am/pm sign towers above the busy gas station.
A Typical ARCO Station

Their gas is cheap, in part, because they don't take credit cards. They do accept debit cards for a fee. The ARCO card avoids that fee.

ARCO is a chain of around 1,400 gas stations operating in five western states: California, Nevada, Arizona, Oregon and Washington. They are famous for low-priced gas. They are also famous for not accepting credit cards.

At most stations, you can pay for gas with a debit card. However, they charge a 45-cent convenience fee for the privilege. That's where the ARCO Debit MasterCard comes in.

Just link one up to your checking account- it doesn't cost a thing- and you can avoid the 45-cent fee.

Here's a rundown of the ARCO Debit card:

  • Free to sign up: There's no application fee, processing or any other fee to get started. Just have your checkbook handy when you sign up- you'll need your routing and account number.
  • Free to use: The card has no annual fee (unless you opt for the "Preferred" card, which I don't recommend), no transaction fees and no surprise fees.
  • Eliminate transaction fees at ARCO and am/pm markets: This is the best, and possibly the only, reason to get the ARCO Debit MasterCard. It's a great solution if you have avoided ARCO because they don't take credit cards.
  • It's a debit card, not a credit card: You can use the ARCO debit card anywhere MasterCard is accepted. The money you spend is drawn directly from your checking account. Many consumer advocates advise against these types of cards because they lack protections that credit cards provide.
  • Everyone qualifies, credit rating not affected: ARCO is not issuing you a line of credit. This means:
    • As long as you have a checking account in good standing, you can get the ARCO debit card.
    • The card has no effect on your credit score. ARCO does pull your credit report from TransUnion to make sure you're a real person and own the checking account you provide them.
  • Pathetic rewards program: ARCO debit is also a rewards card but you shouldn't use it for that reason. The best you can get back is 0.7% and that's only after spending $7,500 and paying a $25 annual fee. And here's the kicker: You aren't rewarded for fuel purchases, even at ARCO. If you're looking for a rewards card, keep looking. You can do better.
  • Internet required: ARCO never sends you a statement or any other correspondence in the mail. You must view your transactions and rewards online. In addition, a surprising number of services are only offered online, including activating your card.
ARCO marketing photo shows the sign at one of their gas stations. Price shows $1.59 for unleaded gas.
Photo courtesy of ARCO/BP Global.
No, the Gas Isn't That Cheap

Apparently ARCO hasn't freshened up their marketing photo in a while. $1.59 a gallon for unleaded? Those were the days.

  • Horrendous customer service: The customer care department is ill trained and ineffective. For example, an ongoing issue has prevented me from using my ARCO card since March 1st, 2010. After six calls and two e-mails, I'm not convinced they even understand what the problem is. But they're still working on it.
  • Fraud protection not a priority: This is the truly unfortunate and somewhat disturbing part of the ARCO Debit experience. Four things bring me to this conclusion:
    • They send activated cards in the mail. This is credit card issuing 101: Wait until the customer receives the card and contacts you before activating it. Anyone could have intercepted my activated, unsigned credit card and gone on a spending spree, draining my checking account in the process.
    • Default PIN is easily guessable. They base your initial secret code on personal information you provide. Sometimes it's your zip code, which is on the paperwork that arrives with your card.
    • Default PIN is not easily changed. You must change your code online and it requires the Java plug-in, which you may not have easy access to.
    • Fraud investigations are slow and one-way. Less than two months after signing up for the card, I was a victim of a fraudulent transaction. It wasn't entirely ARCO's fault. However, after my initial report, I could not follow up with their fraud department. It took over two months to complete the investigation and I was without a card during that time.



Finally, Use a Credit Card at ARCO with No Convenience Fee

Photo shows six gas pumps with two 'PayQuick' payment stations in between.
Pay at the Island, Not the Pump

No personal card readers in the pump at most ARCO stations. A 3:1 pump to pay station ratio is typical.

The best feature of the ARCO Debit MasterCard is the ability to pay at the pump with a card without getting dinged an extra 45 cents. Until this card's invention, you had to be a commercial driver to use a card at ARCO without fees.

Where I live, the two cheapest gas station chains are Costco and ARCO. I have always avoided ARCO because of the surcharge to use credit cards and my unwillingness to pay cash.

Steering clear of ARCO often left me "running on fumes" as I held out for the next time I'm near Costco. There is only one Costco with a gas station within a 50-mile radius of me versus 20 ARCO stations.

I have many more choices for low-cost gas now that I have the ARCO card.


Why Not Pay Cash for ARCO Gas?

Sure, I could pay cash for ARCO gas. But I live a cashless life where possible. By putting everything I can on a credit card, I can track my expenses more easily, get cash back on my purchases and rarely need to visit the ATM.

Plus, paying cash at a gas station requires two interactions with a cashier: First to prepay for my tank of fuel and second to get the change. Both interactions could involve a long line.

Who needs that hassle?


Pay at the Island, Not at the Pump

Even though you are using a card at ARCO, you still might need to wait in line.

At most stations I've been to, there isn't a card reader on the pump itself. The card reader is on an island in between the pumps.

You may find a line at that payment station. There is one "PayQuick" kiosk for every two to four pumps. It accepts cash in addition to debit cards.

It can really slow you down, especially if you get behind a guy with a bunch of crumbly one's!

The receipts also print from these payment stations. If you need one, you're back in that line again.

The system definitely has its drawbacks compared to gas stations that give you your own, personal card reader and receipt printer.

I have seen card readers in the pump at some newer and remodeled ARCO stations. Hopefully this is the new trend for ARCO stations.



What You Need to Sign Up

Graphic shows the bottom left half of a check. The first group of numbers is the routing number. The second group of numbers is the account number.
Signing Up? Get Your Checkbook Out

The ARCO Debit Card links to your checking account. You'll need your routing number and checking account number to sign up.

Signing up is free. Since it's a debit card, your credit history won't disqualify you. There are a few surprising requirements, though.

Let's go through the list:

  • A checking account. ARCO Debit is not a credit card. It is linked to your checking account. Anytime you make a charge on your ARCO Debit card, the money is taken directly out of your checking account. You will need a blank check handy when you sign up- they ask for your routing and account number.
  • An Internet-connected computer. This is a self-service card and many tasks require a computer. For example, you must log in to ARCO's web site to activate your card. You also need a computer to view your statements- they will not send them out in the mail. Find the complete list of tasks in the "What is the ARCO Debit Card" section.
Windows or Mac plus Internet Explorer or Safari plus Java software equals ARCO Debit MasterCard
System Requirements for the ARCO Card

It reads like the specs for the latest computer gadget. It's not. This is what you need to get an ARCO card.

  • Java runtime. Not only do you need a computer but you also need special software installed on it. You can activate your card without Java but you cannot change your easily guessable PIN that ARCO assigns. Read more about this odd requirement and see if you have Java in our "Fraud Protection Shortcomings" section.
  • Your bank statement, preferably online. As part of the sign up process, OptiPay (ARCO's debit card issuer) withdraws 1 cent from and deposits 1 cent to your checking account. This ensures they can draw funds for purchases you make with your ARCO card. When you see these transactions on your statement, it will contain a six-digit code. When you activate the card online, OptiPay asks for this code. If you don't have online access to your checking account, you will have to wait until you receive your bank statement to activate your card.
  • Willingness to deal with substandard customer service. Nearly every interaction I have had with ARCO Debit customer service ended in frustration. Read more in the section "Awful Customer Experience." If all goes smoothly, you won't have to deal with them. Just be forewarned when something goes wrong, your disappointment will likely be compounded when you deal with ARCO Debit MasterCard's customer service.

If you have everything you need, visit to sign up.



A Side Benefit: Cheaper ATM Fees than Your Bank

Here's a benefit that surprised me: Your ARCO Debit MasterCard only charges 75 cents to use an ATM. Bank of America charges me $2.50 when I use a non-BofA ATM.

Whenever I need cash and my own bank isn't near by, I just whip out the ARCO card and save $1.75 on the transaction.

The money still comes out of my BofA checking account. I just pay less to access it.

Of course, it doesn't prevent the bank from which you're withdrawing money from charging you their out-of-network fee (the "double-dip," as it's known).



Buying Gas with Your ARCO Card

Photo of an ARCO 'PayQuick' station, accepting cash and debit cards to buy gas.
Buy Gas at the "PayQuick" Station

You'll find these payment kiosks between the pumps. Don't forget to note your pump number.

Once you activate your card and create a PIN, you're ready to get cheap gas at ARCO. Here's what you do when you pull in:

  1. Note your pump number. You're going to need it in step 3.
  2. Find a "PayQuick" kiosk. They are usually in-between the pumps.
  3. Enter the pump number.
  4. Insert card and enter PIN.
  5. Pump your gas.
  6. Need a receipt? Back to the PayQuick kiosk. Enter the pump number and select "Print Receipt."



Redeeming Your ARCO Debit Card Rewards

You can claim the rewards you earn in one of three ways. Only one method is free if you want to spend the rewards. You can only redeem rewards in $5 increments.

The three options are: Use a debit transaction (possibly free), transfer to your checking account ($1.99) or donate your rewards (free). Let's go through each.


The Free Way to Cash In Your Rewards

Every time you earn $5 in rewards, it is transferred to your "Rewards Account." You can spend money in your rewards account by entering a special PIN when you use your ARCO card as a debit card.

Just go somewhere and swipe your ARCO Debit MasterCard. If the machine asks you "Debit or Credit," choose debit. Now enter your PIN followed by the number 3. For example, if your secret code is 1234, enter 12343.

Whatever you spend at the retailer will come out of your rewards account, rather than your checking account.

You may have noticed a couple of "gotchas" in this scenario:

  • You might have to split up your purchase into two transactions. If you only have $5 in your rewards account, but you're spending $20, you will have to find a way to cover the extra $15. If you're pumping gas at ARCO, this means pumping $5 from your rewards account, then coming back and pumping the rest with your checking account via your ARCO card.
  • You might get hit with a transaction fee. Many, if not most, retailers charge you a fee for using a debit card. Always ask the cashier what the policy is for using a debit card. Grocery stores typically don't charge for using a debit card. ARCO and am/pm won't charge a fee (as long as you're using the ARCO card).


The $1.99 Way to Cash In Your Rewards

ARCO allows you to transfer rewards to your linked checking account. Just log in at and select Transfer Rewards. Your rewards appear in your checking account in a couple of days, minus a $1.99 fee for the transfer.


Donate Your Rewards Free

The final option for depleting your earned rewards is to donate them to one of ARCOs handpicked environmental charities. They do not charge you to donate the rewards.

Here are the companies you can donate to:



Rewards Program Not Very Rewarding, May Even Penalize

ARCO debit offers a multi-tier rewards program. The more you spend, the more you get back. The problem is you just don't get very much back. If you're looking for a reward card, look elsewhere.

The ARCO Card Doesn't Give Much Cash Back

A 1% cashback card leaves the ARCO card in the dust. And you'll likely earn even less than the chart shows: Some ARCO card purchases don't earn rewards.

The best you can get from the ARCO Debit card is 0.7% cash back. You can only get to this level on the "Preferred" version of the card ($24.99 annual fee) and you don't start earning that rate until you've spent over $7,500. Even when you reach that level, you're back to 0.2% again on January 1st.

And this is the "best case scenario."

Many types of transactions don't earn rewards. You don't earn rewards on gas purchases, even at ARCO, for example. Debit card transaction earn very little. Several other limitations could keep from your full earning potential.

It's nice that ARCO offers rewards at all with their cards. If you shop around, though, you can find a card with much greater rewards.


Arco Debit MasterCard Reward Calculator (Best Case)
Dollars SpentCard Type=Cash Back


You Could Lose Money on Preferred Card

ARCO Debit Reward Tiers and Cashback Percentages
Standard CardPreferred Card
Point Tier1Points Per DollarCash Back %Points Per DollarCash Back %
0 - 5,00020.2%40.4%
5,000 - 20,0002.50.25%50.5%
20,000 - 40,00030.3%60.6%
Debit purchase310.1%20.2%


1  Point earnings reset to the bottom tier every January 1st.

2  You cannot earn more than 150,000 points on the standard ARCO Debit MasterCard. The Preferred ARCO card has no point limit.

3  Using the ARCO card as a debit card (where a PIN number is required) always earns the least rewards. Use as a credit card to earn highest rewards.



Point Tier  Levels of reward earnings. Every dollar spent on the ARCO Debit card earns 1 or more points. Each tier dictates the amount of points earned per dollar.

Points Per Dollar  The number of points each dollar earns for purchases for a given tier.

Cash Back %  The cash back percentage each dollar earns for purchases for a given tier.

With the ARCO Debit Preferred Card, you earn double the rewards over the standard card. It comes with a $25 annual fee, where the standard card has no annual fee. Twice the cash back sounds good but the math tells a different story.

In the best-case scenario, you need to spend over $5,000 just to earn back the annual fee and over $8,000 before your rewards begin to outpace the standard card.

Unless you put an average of $22 per day on the card (excluding gas purchases), you're actually losing money on the ARCO Preferred card.

Moreover, if you're putting that kind of money on your credit card, you can get a much higher return on a different card all together. With a reward card offering 1% cash back, you would have already earned more than $50 by the time you've worked off the annual fee on the ARCO Preferred MasterCard.


Limitations and Exclusions on ARCO Rewards Card

The cash back numbers cited to this point represent the "best case scenario." In practice, your rewards could be much lower. Some transactions don't as earn as much as others. Some transactions don't earn any rewards at all. Points and reward tiers don't last forever.

Here's what is in the fine print that could keep you from earning the maximum reward.


Transactions that Earn Fewer or No Rewards

  • Debit card purchases earn less. Swiping your card as a debit card rather than a MasterCard always earn 0.1% on the standard card and 0.2% on the Preferred card, no matter how much you spend. If you have to enter a PIN, you are using your ARCO card as a debit card. If the cashier asks you "Debit or credit," always say credit!
  • Gas purchases earn nothing. Yes, it's a gas card. However, buying gas with your ARCO card at any gas station gets you nothing. Not even at ARCO.
  • AM/PM purchases earn nothing. The convenience store attached to most ARCO stations, AM/PM, is a reward-free zone. Are they begging you to shop at 7-Eleven instead? I guess junk food is its own reward.
  • Preferred Card may earn fewer points per dollar than advertised. In the marketing materials, the top two tiers for the Preferred card are 6 and 7 points per dollar. The cardholder agreement says 5.5 and 6. We'd love to hear from anyone who has reached this level to see what really happens.
  • Transactions that result in cash earn nothing. This one makes sense. If you get cash back from a debit purchase, that cash doesn't earn rewards. If it did, you could deposit the cash back in your bank and then pull it out again, profiting a little bit each time you repeat the process. The following types of transactions will not earn you rewards:
    • Money Transfer
    • Cash Advance
    • Cash Back with Purchase
    • ATM Cash Disbursements
    • Money Orders
    • Travelers Checks
    • Foreign Currency
    • Truck Stop Transactions (excludes ATM transactions)
    • Gaming Transactions
    • Tax Payments


Other Limitations

  • Points expire after 36 months. Use them or lose them. When you make a purchase, you earn points. Three years later, those points are gone if you haven't cashed them in.
  • Point tiers revert to bottom tier on January 1st. You only have until December 31st to climb the point tier ladder. You start all over again on New Year's Day.
  • Cash rewards $5 at a time. Your rewards can only be cashed in $5 increments. You'll probably be left with some change.
  • Must cash out on a debit purchase to avoid charge. There are only two ways to redeem your rewards without incurring a charge: Through a debit transaction (for which the retailer may charge you) or by donating the rewards to ARCO's pet charities. You can transfer the rewards to your checking account but it will cost you $1.99.
  • Don't Max Out on Points. On the standard card, you stop earning rewards at 150,000 points. You would have to spend over $52,000 to reach this level. The Preferred card has no such limit.
  • Limited to $700 and 30 transactions per week. I found out the hard way- you cannot spend more than $700 in a seven-day period nor ring up more than 30 transactions. It takes over $15,000 to reach the top tier on the standard card. The $700 max per week means you can't possibly spend more than $36,400.



Lousy Customer Service

ARCO Debit's customer service operation is not a well-oiled machine. From ill-trained employees to unforgivable web site glitches to a slow, unresponsive fraud resolution department, these things and more led me to exclaim to the customer service supervisor, "Your service is a joke!"

What is most disappointing: I have made six calls, two e-mails and talked with three different supervisors (so far) in trying to regain use of my ARCO card after resolving a fraudulent transaction. No one has told me, "I'm sorry. I will take ownership of this issue and commit to following through until it is resolved." At best, they tell me someone will get back to me. Only once has this actually happened.

ARCO is apparently trying to run their debit card operation on the cheap, which is consistent with their philosophy of operating "efficiently so that we can pass savings on to you." Apparently poor customer care is the trade-off you have to make for cheap ARCO gas on a credit card.

As long as you don't need a lot of handholding and you can do without your ARCO card for months at a time when something goes wrong, you can probably accept impaired customer service as a part of the package. But you shouldn't have to.


Unable to Use Debit Card for 7 Months and Counting

After resolving fraud on my account (more on this in the next section), I got a new ARCO Debit card in the mail (pre-activated, also another story). At long last, I was ready to visit ARCO gas stations again. At least, so I thought.

While the credit card portion of the ARCO card worked, my PIN had been reset, preventing me from using it as a debit card. ARCO stations do not accept credit cards, just debit cards.

The only way to change the PIN is through the online account associated with the card. OptiPay (ARCO's credit card issuer) had locked me out of my online account. Therefore, until OptiPay restores access to my online account, I cannot use my ARCO card as a debit card.

I first reported this problem March 11, 2010 and made six calls to customer care. I'm still waiting for OptiPay to resolve the issue.

A locked account is not an unusual concept. Financial institutions will lock your online account for many reasons, such as too many failed password attempts. Unlocking an account usually requires a simple call to customer service where you prove your identity and the rep unlocks the account.

At OptiPay, they need to contact their "technical services" department to unlock an account.

Over the course of a month, they sent three e-mails to this department. To date, no one has received a response from technical services. And nobody at OptiPay customer care seemed concerned or surprised at the lack of response.


Customer Care Reps Ill-Trained on Their Own Web Site

The most frustrating part about the ongoing locked account incident (see previous section) is OptiPay customer care's utter lack of familiarity with the ARCO Debit online account management. You really cannot use the card without the web site. OptiPay customer care is near helpless when it comes to assisting you with it.

When I got my new card in the mail, the sticker and paperwork told me to go to to activate my card (never mind that the card was already activated). That process always ended in an error telling me to call customer service.

It took three calls before a supervisor told me they were having a technical issue registering secondary and replacement cards.

The supervisor told me to try again in two weeks. If it didn't work, try again in another two weeks. Eventually technical services will fix the problem.

That's the best he could do for me.

I asked if we could just start over with a brand new account. He told me I would have to cancel this one and wait 90 days before opening a new one. He could not waive that 90-day requirement.

I waited two weeks and tried again registering again. Same problem. So I made call number four to OptiPay customer care.

At this point, I was more familiar with their web site and procedures than the woman who answered:

  • I told her I was locked out of my online account. She essentially said, "The card is activated, what's the problem?"
  • When I told her I was having trouble registering, she wanted to go through the process again. She didn't even know the web address to start the process (
  • As we went through the process, she asked me what I saw on every page, rather than explaining what I should be doing on the page.
  • At one point, after describing a page deep into the process, she asked, "Isn't there just like a 'Register the Card' button or something like that?"

On my sixth call, I asked the customer care supervisor to confirm the accuracy of the following statement: "My card is activated but my PIN has been reset. I'm locked out of my account and cannot reset my PIN until my account is unlocked." His answer: "I don't know."

I broke each part of the statement down. The only part that didn't elicit an "I don't know" was whether my card was activated.

And this is the supervisor.


Many Tasks Only Available Online

The ARCO Debit MasterCard is a decidedly self-service card. This is one way ARCO minimizes its costs. If you're not comfortable managing your card online, this will be a deal breaker.

Here are the tasks that you must perform online at You cannot do any of these tasks over the phone or by mail:

  • Activate a new card
  • View your statement
  • Update your PIN code
  • Report a lost or stolen card
  • Change your billing address
  • Request an additional card
  • Update your linked checking account info



Fraud Protection Shortcomings

Combo photo shows a credit card receipt dated May 7 and an e-mail dated May 11. The e-mail subject line reads 'MasterCard Activation Confirmation.'
No Activation Required, Despite Sticker

OptiPay sends activated debit cards in the mail. If a criminal intercepted it, he could clean out your checking account.

ARCO hired a company OptiPay to run their debit card operation. They don't appear to put a lot of emphasis on cardholder security and fraud prevention.

They send activated cards in the mail. They often assign easily guessable PIN codes and sometimes the number is on the paperwork accompanying the card. Changing the PIN number requires special software that you might not be able to use. Fraud resolution is slow and they don't allow you to speak with your investigator.

OptiPay seems to have a lot to learn about protecting their customers from fraud. In this day and age, that's something to be ashamed of.


OptiPay Sends Activated Cards in the Mail

I have never experienced a more brazen breach of industry standard credit card security procedures: OptiPay (ARCO Debit's card issuer) sent me already activated cards in the mail.

OptiPay's parent company, HSBC, also makes a practice of sending pre-activated cards through the mail. Read the full story, including HSBC's response.

Fraudulent transactions hit debit card users hard: The stolen money comes directly out of victims' checking account. Banks don't reimburse the money for weeks.

Fortunately, they don't send out the primary card pre-activated- only additional and replacement cards. Learn how to avoid getting a pre-activated card below.


Recommendation: Only Trust First ARCO Card

Until OptiPay fixes this problem, protect yourself by ensuring they don't issue any card other than the one you get initially. Any subsequent card OptiPay sends in the mail is likely to arrive pre-activated.

This means:

  • Don't order an additional card. Don't get a second card for your spouse, child or anyone else.
  • Cancel account if card is lost or stolen. The replacement card comes already activated. If you cancel your account, you must wait 90 days before opening a new one.
  • Cancel account several months before card expires. I suspect, though I don't know for certain, that the card OptiPay sends to replace the expiring card is pre-activated. Why take a chance? Mark your calendar and cancel your ARCO card at least three months before the expiration date. Again, you will have to wait 90 days before you can open a new ARCO card account.

If you end up canceling your card, don't forget to cash out your rewards first!


How I Found Out About the Debit Card Security Weakness

I was a victim of fraud on my first ARCO card. After closing the fraud investigation, OptiPay sent me a replacement card in the mail. I had trouble activating the card, so I called OptiPay customer care. To my surprise, the rep told me the card was already active.

He was right- I swiped the card at fast food restaurant and it went through without a hitch.

OptiPay failed to follow this industry standard cardholder security practice when it was most important: Directly after resolving fraud on an account.

At this point, I was willing to give OptiPay the benefit of the doubt. Perhaps my earlier, failed attempt at activation was partially successful.

I signed up for an entirely new ARCO debit account. I got the card in the mail. Before activating it, I attempted to make a purchase. The credit card machine rejected my transaction.

So far, so good.

Then I requested an additional card for my wife. A few hours after pulling it from the mailbox, I swiped the card at the gas station. The transaction was approved.

Later, I checked my bank statement online. The tank of gas was deducted from my balance.

Had this transaction been fraudulent, I would now be fighting with my bank to get my money back. If somebody had stolen my card, the thief probably wouldn't have stopped at a tank of gas.



Adventures in Fraud Resolution

Close-up photo of a tattered looking credit card reader.
Inspect Closely Before Insertion

Criminals are placing false fronts on card readers and stealing from anyone who slides a card through. See pictures of these scary devices.

Lucky for you, though unlucky for me personally, I got a chance to test out ARCO Debit's fraud resolution department. I was not impressed. The process took over two months and they refused to allow me to send a lead on the case to the investigator.

I had my ARCO card less than two months. I was heading up to the Silicon Valley for an early Thanksgiving celebration. I used my ARCO card at an ARCO along the way. Big mistake.

Criminals had rigged ARCO's card reader with a "card skimmer." You must see the pictures of this diabolically ingenious device.

A card skimmer reads the stripe on your card while a tiny hidden camera records you entering your PIN number.

Several weeks later, I noticed a $500 ATM withdrawal at a Washington Mutual branch over 200 miles away. Since I made a charge on my ARCO Debit card in my hometown the same day, I would have had to be in two places at once for this withdrawal to legitimate!

I promptly called my bank, Bank of America, and they started the fraud investigation.  I reported the fraud to ARCO Debit shortly thereafter. Bank of America severed the link between my ARCO card and my checking account. ARCO suspended the card.

So far, so good.

A little over week later, BofA said they had completed their investigation and would be returning the $500 to my account. Great!

In the meantime, I called ARCO Debit because I found out how the fraudsters got my info. That's when things went downhill.

The customer service rep told me I couldn't talk to the fraud department about the investigation. They would contact me when the case is resolved. Furthermore, it would take up to two months before they complete the investigation.

Fast forward to two months later, not a peep from ARCO. I called them up and, through persistence and insistence, got the phone number and extension of my caseworker. Predictably, she didn't return my message.

I called back two days later, apparently near or after quitting time at their office where a manager spoke quite candidly about their operation. She told me they only have two people handling these cases and they are still working on reports from December. She assured me that everyone gets a call back eventually.

A week later, still no callback, so I called my caseworker. To my surprise, she answered the phone.

I spent about 10 minutes on the phone with her. She asked me standard questions: Was the card in my possession? Did I write my PIN on the card? Etc. She was familiar with the skimmer that was installed at the ARCO I visited.

At the end of the conversation, she said the case is resolved and she will send out a new card.

The whole process took two and a half months. It's a good thing I don't depend on the ARCO card for every day purchases.


Pre-assigned PIN is Easily Guessable

The default ARCO card PIN code is the last four digits of your Social Security number, the first four digits of you Zip code or first four digits of checking account. While not optimal from a security standpoint, other companies have similar practices. The difference with ARCO: You may have trouble changing the PIN.

Using your Zip code as the initial PIN number is particularly problematic: ARCO is effectively sending PIN code in the paperwork that accompanies your card. This is a big "no-no" in the debit card industry for obvious reasons.

A little research shows OptiPay/ARCO is not alone in making the default PIN easily guessable. Nor are they the worst example of this practice.

I found two debit card issuers who set the PIN to a number on the card itself. PlainsCapital Bank says, "you assume all associated risks" if you don't change the PIN etched right into the card.

Another issuer sets the PIN to the last six digits of your Social Security number. Six out of nine digits of the number that should be among your most tightly held secrets.

There are other safeguards in place to ensure that a thief can't just open the envelope with your ARCO card and start using it, even if he can guess your PIN number. The problem is you may have a tough time changing your PIN number once you activate the card, as well see in the next section.


Changing PIN Code Requires Java Runtime

You cannot change your ARCO Debit PIN over the phone. You must use your computer. But you need more than just a web browser- you need an additional program called Java.

If you haven't downloaded and installed Java in the past, you will need to do so. It doesn't come pre-installed with Windows or on a Mac.

The Java web site has a page to determine whether Java is installed on your computer.

Once you install Java you must maintain it. You run the risk of infecting your PC with a computer virus unless you keep it up to date.

If you're planning to manage your ARCO card from your work computer, the IT department may not let you install Java on your computer.

If you rely on your iPhone, iPad or similar device to surf the web, Java may not be an option.

You cannot call OptiPay (ARCO Debit's issuer) if you can't find a suitable computer. The customer service department can't change it for you. Their only advice on their "Change PIN" page: "Please try to activate your card via a different network location (such as from your home) that does not restrict Java."

Put the two together: An easily guessable PIN code and requiring a computer that can run Java to change it, and you have a glaring vulnerability in your fraud defenses.



Who Runs the ARCO Debit MasterCard Operation?

Photo of an HSBC high-rise building with an overlaid OptiPay logo.
Photo courtesy of HSBC.
OptiPay Manages the ARCO Debit MasterCard

This 5 year old company is owned by megabank HSBC.

ARCO offers their debit card through a company called OptiPay, which is owned by HSBC Bank. OptiPay opened for buisness in 2005.

ARCO Debit seems to be OptiPay's flagship card. It is the only debit card highlighted on their Cards page.

When you call the ARCO Debit customer care center, you're talking to OptiPay. The web site is also run by OptiPay.

Their innovation is a card that "combines the functionality of a debit card with that of an accrued value (or stored value) rewards card." In other words, it is two cards in one:

  • A traditional debit card with a MasterCard logo.
  • A pre-paid or gift card for the rewards feature. When you earn rewards, they are stored on the pre-paid side of the card. When you spend the rewards, it comes out of your rewards account, rather than your checking account.



Talk About It

Would you like to share your experiences with ARCO or the ARCO Debit MasterCard? Do you have questions this review didn't answer? Do you have suggestions for alternatives to the ARCO card? Has a bank ever sent you a pre-activated card in the mail?

Speak your mind and find out what others are saying about the ARCO card on our Feedback page.


Originally Published:  Sunday, July 4, 2010, 5:00 PM PT

Last Updated:  Thursday, July 14, 2011, 10:04 PM PT

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