Wondering what options you have for processing debit and check cards? Jeff has the answers:
There are two ways for your business to process transactions from customers who want to pay with a debit or check card. The method you choose can either be based on a PIN or a signature:
PIN
When a customer is ready to make a purchase, they simply enter their personal identification number on a keypad after using their debit card.
Signature
Customers make their purchase by swiping their card and then signing the receipt that’s printed out.
Which One’s Best?
If this was 2002, we would advise you to process all of these transactions via the PIN method. The reason is during that time, it was significantly cheaper than the second option. However, because the last decade has seen changes made to the general pricing structure of these transactions, that’s no longer the case.
About five years ago, the cost to merchants to process signature based transactions dropped. And for the last five years, the cost of processing transactions with a PIN has actually risen. The end result is that for most businesses, using signatures to process these transactions will result in the largest savings.
The one caveat to this scenario is if you’re processing transactions that are over $50, you may save a bit of money by choosing the PIN method. However, that’s going to change in October of this year. The reason is there’s new legislation that will once again impact the pricing structure of how check and debit card transactions are processed.
Since that’s just six months away, if you’re currently deciding how your business is going to handle payments, chances are it’s going to make the most sense to go with signatures.
If you have questions about how October’s changes will impact your specific business, Jeff will be happy to answer them for you.
Tags: credit cards, merchants
