Understanding Debit Card Transactions
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PIN-BASED DEBIT CARD TRANSACTIONS ( “Online Debit” )
Pin-based debit card transactions can only be performed at the point-of-sale, as they require the customer to enter their pin number, into a pci-compliant pin-pad. These are also referred to as “Online Debit Transactions”, as the pin-number is verified through the appropriate pin network.
The pin number is verified by the Pin Network and the funds are pulled from the customers checking account. There are several different networks, including Star, InterLink, NYCE, Maestro, each of which charges a different interchange fee.
Recent increases in the Pin-Network fees, have forced a Percentage to be added to the merchant account fees paid by merchants that accept pin-based debit trransaction. Fees average $0.35 per transaction, plus a percentage rate of 0.75% of the transaction amount. In most cases, pin-based debit is still the cheapest transaction methood for retail businesss.
SIGNATURE BASED DEBIT TRANSACTIONS ( “Off-Line Debit” )
Debit cards “Branded” by Visa or Mastercard will pass through as a “Signature Based” transaction and require a signature, at the point-of-sale. These transactions are subject to Visa Interchange or Mastercard Interchange, depending on their branding. Merchants will be assessed the appropiate rate, very similar too a credit card transaction. These card types are also the only Debit Card types that can be used on the internet or over the telephone, as a pin number is not required.
Inconclussion, retail merchants can save money on their credit card processing fees by adding a pin-pad and signing up pin-based debit. The higher your average ticket, greater the savings.
Give me a call to discuss how much money you can save by accepting pin-based debit transactions.
MARK SANDS
1st National Processing
http://www.usa-merchantaccount.com
1-866 828-8683
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