Is Debit Card Processing Right For Your Business?

In this section, you'll be introduced to Debit Card processing, the first cousin of credit card processing. We'll discuss the following subjects:

  • What's the Difference Between Debit and Credit Processing?
  • What's the Difference Between SIGNATURE DEBIT and ONLINE DEBIT Processing?
  • How does Pricing Differ Between Signature Debit and Online Debit?

Should MY business accept Online Debit cards and Credit Cards?

The answer to this question depends on two factors:

  1. Are most of your transactions face-to-face card-in-hand?
  2. Is your average ticket amount at least $30 or greater?

If the answer to both of these questions is 'yes', then your business would absolutely reduce the cost of processing credit cards by adding online debit capability. Lets do the math:

Scenario 1: A customer charges a $50 purchase on a Visa check card (which is actually a Debit card masquerading as a Credit card). The merchant's credit card processing rate is 1.69% plus $.25 per item. So if the merchant processes this transaction as Signature Debit at his normal credit card processing rates, his cost to process this transaction would be $1.10 ($50 X 1.69% plus $.25). Had this merchant processed this same transaction as online debit, his cost would have been approxiomately $.55, half the cost.

Scenario 2: This same merchant processes a customer transaction of $100, paid for on a Visa check card. If this merchant processes this transaction as Signature Debit at his normal credit card processing rate, his cost to process this transaction would be $1.94. Had this merchant processed this same transaction as online debit, his cost would have remained the same approximate $.55. That's a savings of $1.39 for one transaction!

Conclusions: Cost savings increase incrementally as average ticket amount increases. Even considering the cost of adding a pin pad, most businesses who meet the above criteria would absolutely benefit by adding online debit capability.

Learn more about Difference Between Signature and Online Debit

Learn more about Debit vs Credit Card Processing