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Debit Card Processing

Costs less to process - Funds are guaranteed - Receive your money faster

What It Is and How It Works

Debit cards work with the same ease as credit cards and allow customers to deduct funds for purchases from their bank account (usually their checking account). True debit cards require a PIN number to be entered before a purchase can be complete. Many people refer to the Visa/MasterCard Check Cards as Debit cards since they do the same as true Debit cards, except for the fact these check cards do not require a PIN number to make purchases. You can easily identify check cards as they will have the familiar Visa or MasterCard logos on them.

The process works just like accepting credit cards except when you enter in the customers debit card information the amount to cover the purchase is deducted from the customers' bank account.

Make sure when you connect to accept debit cards that a verification service is included. The verification service will check a negative database of bad check writers. This will drastically reduce the number of bad checks you might would receive.

Do you operate a retail establishment? You can save bundles on processing costs by accepting debit cards with the addition of a PIN Pad. Unless the swipe terminal you're using includes an internal PIN pad, you will want to invest in an external one.

Processing debit/check cards as a regular credit card transaction can mean paying twice the amount for processing. By using a PIN pad for debit transactions you only pay a per transaction fee (between $0.35 and $0.55), no discount rate of any kind. Also, it should be noted that in order to ONLY incur a per transaction fee the customer MUST input their 4-digit PIN number into the PIN pad or your processing terminal (if the unit has an internal PIN pad). If the customer doesn't enter their PIN number, the typical per transaction and discount rate will be charged to those using debit cards with Visa or MasterCard logos on them (also called check cards).

True debit cards like Star, MAC, Honer, NYCE, Pulse, Interlink, and Maestro will only incur a per transaction fee because the customer must input their PIN number in order to use the card -- it's optional for Check Card customers, but it will save you money so encourage them to enter their PIN number, if they know it. This is ONLY available for retail establishments.

If you're an Internet merchant you will still incur the same charges for debit card processing as you do with credit card processing. There is currently no special Debit card acceptance system in place that only incurs a per transaction fee for Internet businesses. You can save money by using an electronic checks (eChecks) service for your website.

Debit/ATM Card Case Study

Here's an example case study we completed to show you the savings by using a PIN Pad.

Visa Debit/check card processed as a credit card sale:

Visa Debit/check card processed using a PIN pad:

Example Total Savings: $4.37 to $4.62 per order

Think how much you can save in processing costs every month!

Solution Benefits

• No charge backs

• Reduced employee theft

• Ability to offer a cash-back option to customers

• Increased revenues

• No discount rate, only a per transaction fee

• Reduced risk of bad check losses

Internal or External? -- Choosing a PIN Pad

When it comes to choosing an internal or external PIN pad for your retail establishment you will want to weigh in the pros and cons.

Internal PIN Pads

If you're someone who wants an all-in-one unit then this may be the route you want to go. These processing terminals have a smaller footprint (since the PIN pad is internal) which doesn't take up much space.

External PIN Pads

If you don't mind having two pieces of processing equipment (terminal for credit cards and external, usually handheld unit for Debit transactions) then you may want to opt for an external PIN pad. IVI Checkmate, a manufacturer of payment processing equipment, completed a survey and found a few reasons why choosing an external PIN pad might be in your best interest.

• Swiveling can take up more counter space

• Most merchants don't place their terminals in a customer-accessible location

• You may not want customers handling your processing terminal

• Strain on cables caused by swiveling can increase equipment failure rates

Who Needs This Solution?

Debit card processing is another good additional processing solution to credit cards. It is also the fastest growing way to pay for orders, topping credit cards. Any business no matter what industry they may be in can benefit from accepting debit cards. The convenience of not having to write out a check is something that can really draw people to use their debit card to make purchases. Retail merchants can certainly save themselves a lot of money each month by investing in a low cost PIN pad to connect to their swipe terminal. Again, online merchants can save money by looking into an eCheck acceptance service.

Debit Card Processing Resources

Any Merchant Account Provider will be able to set you up to accept debit cards if you are interested. Contact your provider now for details or search for one here on MerchantSeek, click here.