What's The Difference Between
Signature and
Online Debit?

There are two types of Debit processing:

• Online PIN based, which requires that the Merchant utilize a Pin Pad device attached to the processing terminal, and further requires that the customer successfully enter his "pin number" into the pin pad before the transaction may be completed.
• Signature or "Check Card", which essentially permits both Merchant and customer to process the transaction on any Visa or MasterCard branded Check Card exactly as if the card were a credit card. A Pin Pad device is not required.

From the cardholder viewpoint, there is absolutely no difference whether the Merchant processes the debit card via online or signature. The same funds still come out of the same existing pool pool of funds either way.

For the Merchant, however, there may be a major difference in his expense incurred to process the transaction, depending on the amount of the transaction. For more information on Debit Interchange fees click here.

Please click here for an excellent article from the Chicago Federal Reserve regarding costs and benefits of two types of debit card authorization methods