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Benefits of PIN entry
- Dramatically reduces processing fees as much as 85% or more
- Guarantees payment to the retailer
- Eliminates credit card chargebacks
- Provides customer with an increased number of payment options
- Reduces transaction time and increases the speed of checkout
Example:
A $100 purchase made with a debit/check card ran as a credit card (offline) cost approximately $1.94.
A $100 purchase made with a debit/check card ran as a debit (online) using a pinpad can cost as little as $.34.* That's a savings of 82%.
The higher the sale amount the more you save! See the example below.**
| Sale Amount |
Debit Cost |
Credit Card Cost |
Savings |
| $15 |
.34¢ |
.50¢ |
32% |
| $50 |
.34¢ |
$1.10 |
69% |
| $100 |
.34¢ |
$1.94 |
82% |
| $200 |
.34¢ |
$3.63 |
91% |
| $500 |
.34¢ |
$8.70 |
96% |
* Rate based upon Cash Station Network debit card and $.25 transaction fee
** Interchange rates for each debit network vary
What is Debit?
The debit payment type derives its name from the process of the retailer debiting payment directly from the consumer's checking account. Debit funds are accessed through a consumer's ATM card often called a checkcard or an offline debit card. By definition, the checkcard is an ATM card that that can be used at a point of service. A checkcard can be identified by a MasterCard or Visa logo on the front or back of the card. There are two brands of checkcards, the Visa Check Card, and the MasterCard MasterMoney.
Statistics
- 145 million debit cards issued in 2001 alone
- Debit card transactions are projected to grow to 28.6 billion transactions per year, more than a three-fold increase from the year 2000.
- Between 1995 and 1999 debit card volume rose over 600%, while credit card volume rose 56%
- Debit cards are preferred over credit cards by consumers, second only to cash
- Debit cards represent 26% of consumer payment while checks represent 18% and credit cards represent 21%
(Sources: ATM and Debit News, June 2002; Faulkner & Gray's Bank Network News, July 2001; Dove Consulting Group Consumer Study, June 2002)
How do retailers implement online debit?
Retailers must install a simple PIN pad device and integrate the necessary software components into their store level POS applications. The PIN pad encrypts the transaction record to be authorized for security and the electronic payment software transmits the encrypted transaction for authorization through the retailer’s current credit card processor to the debit network to which they are already connected.
When the customer tenders a checkcard, the PIN (Personal Identification Number) must be entered in order to have the transaction authorized and processed as a debit transaction.
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