DEBIT CARD PROCESSING 

Debit card processing is almost the same as credit card processing, with both types allowing their customers to take funds out of their accounts to make payments. These funds generally come out of a bank account or a checking account at their banks. However, a true debit card will need a PIN number to be able to access the account and withdraw money. The Visa and Master Check cards are often called as debit cards since they too perform the same functions as the debit cards. However, the only difference between the two is that the Visa or Master Check cards do not require PIN access. Check cards are identifiable very easily as they have the Visa and Master Logo embedded on them.

The process of debit card systems is very much like what is done with credit cards, the cardholder entering their debit card number and then the amount of funds to be deducted from their account in order to make their purchase. The amount then gets automatically removed from their card checking account. When the debit card acceptance takes place, you should ensure that a verification procedure is in place, as this will check if the card holder is part of the bad check writers list, thus giving you a pre-warning not to accept the payment.

A merchant can save a lot of cash by going into accepting debit card payments, by adding in a PIN pad, either internal or externally if your swipe machine doesn’t already have one. Processing a debit card as a credit card will lead to your paying extra on the transaction costs. Just the inclusion of a PIN code will reduce that cost to a mere per transaction fee, and no discounted rates to worry about. This option however, is available only to retail outlets, where the customer has to swipe their card at the check-out counters. It is advisable to make sure they enter their PIN code while processing, so that the transaction rate and discount rates are not charged.

The debit card processing system has many advantages to its name. Some of them are: -

• Reduced employee theft – debit card processing is more difficult to be broken into illegally since the PIN number is required, as opposed to a credit card. Hence the risk of thefts is lesser when it comes to the debit cards.
• No chargeback’s – chargeback’s are avoided because the customer themselves are making the transaction and entering their PIN numbers, thus not giving them a chance to complain about it.
• Cash-back option for customers – the merchants have an option of giving customer their money back directly from the bank accounts
• Low risk of bad checks – debit cards ensure that the problem of getting bad checks from customers is reduced
• Increased revenue
• No discount rates – only the transaction fee is applicable.

The debit card processing industry is one that is catching up in almost every business type today, due to its ease of operation, and the fact that they do not have to write out checks or make any other type of transactions to get their purchase processed. It is especially so in the case of retail merchants, who save on a lot of expenses by getting a low priced PIN pad for the swiping terminals.

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