Debit Card Processing

Most merchants should accept debit cards but it is not always easy to understand how debit card processing works. Merchants can do debit card processing in one of the following two ways:

Offline Debit Card Processing

The most recognized way to accept debit cards is an offline debit transaction. With this type of sale the merchant accepts a debit card the same way in which they would accept a normal credit card. The card is swiped through the terminal and the customer signs the receipt. There is no difference in the way a credit card or an off-line debit card is processed. The one thing that i crucial and merchants must remember is that the debit card must have a VISA® or MasterCard® logo on it. Cards that do not have the Visa or MasterCard logo can not be processed off-line and will not be approved.

Online Debit Card Processing

Online Debit Card Processing can be cheaper and can be a more secure method for accepting debit cards. In this type of sale the card must be swiped through the terminal or internal PIN Pad that is used to enter the merchant’s four digit PIN. The terminal will pass the encrypted number to the bank for verification. The merchant will then be paid for the transaction in the same way they would be paid on a credit card sale. The cost of this type of transaction is lower due to the fact that the merchant is charged by the processing companies. Rather than paying a percentage of the transaction, as with a credit card or offline debit transaction, there is only a minimal higher flat fee.