Your customers are likely to use both credit and debit cards when they make a purchase from you, and while these two payment vehicles look like the same thing, they’re actually quite different when it comes to processing. For the customer, the biggest difference is simply the source of funds. Credit cards are borrowed money while debit cards take money directly from an account to pay the merchant. For stores like yours, though, the difference runs much deeper.
Where They’re Processed
The difference between payment process solutions for both cards begins from the moment the customer presses credit or debit on the PIN pad. If they choose to press credit, it will be processed through a credit card network, like Visa or MasterCard. The details go through your payment processor to the network, then on to the issuer to get the signal of acceptance. Then the decision backtracks to your point of sale. Credit card processing sounds complex, but it happens in just a few moments.
Debit card processing, though, requires a PIN to complete the transaction. Once that is entered, it moves through an entirely different network. Star and Interlink are two of the biggest. Then approval is given or denied, and the decision works its way back to you.
The physical space in which these two cards are processed isn’t the only big difference. The fees can vary, too. You pay an interchange fee on every debit or credit card transaction you handle. The fee, though, can vary by the type of card. If you’re running a card not present transaction, you’re likely to pay the same fee for either a credit or a debit card. If you’re handling an in-person sale, though, the interchange fees on debit cards are often less than they are on credit cards.
No matter what type of card your customers are using, understanding how the process works is key to getting you the rates and perks you deserve from your processing equipment.
Contact Y2Payments today at 888-693-1850 to learn how we can help provide you with a superior payment system.