Don’t Play Debit Roulette

**Administrator**

Don’t Play Debit Roulette

In a highly competitive economy, there is no sense in gambling with your payment processing options; businesses need every advantage to win in today’s global marketplace. Accepting payments through customer debit cards increases the odds that the customer who favors this particular payment option will be happy and continually return.

There are two forms of debit card transactions and every merchant should have both.

1. PIN Based Debit
2. Signature Based Debit

PIN based debit is also called “online debit” because the transaction is conveyed electronically at the point of sale. The customer confirms the sale by keying in their personal identification number (PIN), and the funds are immediately captured through a nationwide EFT network from the customer’s bank account. The funds are deposited into the merchant’s account in 2-3 business days for a nominal per item fee.

The service is much more cost effective than credit card transactions, and PIN based debit card use is becoming an extremely popular option because of its safety and security. People who use this option don’t have to carry around a lot of cash, and they get to see the details of their transactions in their bank statements. The default on your point-of-sale device should be set to PIN based.

However, if a customer prefers, there is signature-based debit also called “offline debit” and this is another well-liked payment option. The customer uses their Mastercard or Visa Check Card just like a credit card. The card is swiped and the point of sale device gives a draft for the customer to sign. The funds are transferred to the merchant’s bank account. Discount rates apply with this option, as well as a small transaction fee. Chargebacks are also possible. Many young people are using these cards because it gives them the convenience and clout of a credit card. They can also be used to purchase over the Internet. If a merchant can accept credit cards, they can usually accept signature-based debit cards.

Riding the Wave

Even the Federal government is singing the praises of debit card use for consumers. Please see the consumer guide: “Are You Riding the Debit Card Wave?”

Debit cards are seen as safer than cash and more convenient than checks. So make room next to your cash register for a debit terminal, PIN pad and printer, and reduce the risk that a customer may not have the right payment option when the impulse to buy is upon them.

There’s virtually no risk in accepting PIN based-debit card payments, so make sure it’s an option at your cash register. It’s a sure thing!

Rick David writes for a Merchant Newsletter @ Merchant America. He also writes a humor column called, "Don't Laugh It Could Happen To You" for http://sandiego.merchantamerica.com.