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As more and more consumers become more conscientious of their spending, debit card transactions continue to rise. Debit cards offer consumers the same convenience of credit cards when making a purchase, however instead of reducing their available credit, money for the purchase is deducted from their bank account. For consumers the difference between the two types of cards may end there. Merchants, on the other hand, must understand the difference between credit card processing and the processing of a debit card transactions to better manage fees associated with accepting this form of payment. Here we look at several factors that must be considered when processing a debit card. Verification system With credit card processing, you must always ensure there is a verification system in place to determine if the credit card presented has available funds to cover the purchase. The same is true for debit card transactions. The verification system should also confirm is a customers bank account has the funds to cover a purchase. This is vital to ensure the merchant receives payment for products or services. PIN pad Credit card processing fees are different for credit card transactions and debit card transactions. Some credit card terminals have internal PIN pads which do not require the customer to enter their PIN number to process the transaction. This applies only to customers using a debit/check card which can be processed as either a debit or credit card. While eliminating this step may seem like a convenience, it will end up costing the merchant more in credit card processing fees. When a debit card is processed like a regular credit card, the merchant pays twice the amount of fees for each transaction. To reduce fees, merchants can install and encourage customers to enter their PIN number into an external PIN pad. Another benefit of the external PIN pad is for customers using a “true” debit card, who must enter a PIN number in order to use their debit card. It is important to note that the external PIN pad will only help retail establishments reduce credit card processing fees. Benefits of debit card transactions When you provide convenient payment options to your customers, you automatically increase your sales and revenue. With debit cards, especially those that require PIN numbers, having an external PIN pad reduces your per transaction fee and no discount rate is applied. When customers use their PIN, chargebacks are reduced if not eliminated and customers are also given the option of receiving cash-back which is hugely popular for debit card users looking to avoid ATM fees. By accepting debit cards and credit cards at your business, there is also a reduced risk of employee theft which is a major concern when dealing with cash only or even cash and check transactions. Credit card processing ensures you receive payment for your product or services while at the same time offering your customers additional payment options. As a merchant, it is important to understand how you are charged for each type of transaction, which will in turn allow you to reduce fees when possible. | 
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