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:
and Credit Cards? The answer to this question depends on two factors:
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.
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