Do I need Signature Debit and Pin Debit?

The Brands

Customers can purchase products and pay for services using different types of credit cards: Business, Corporate, Government, Personal, Rewards - Points or Cash, Standard, Debit and Pin Debit. I have discussed in previous blogs the difference in merchant processing Business, Corporate, Government and Personal. 

PIN PAD for PIN Debit Card Acceptance

 

Today, I would like explain the difference between DEBIT CARDS: PIN DEBIT (Personal Identification Number) and SIGNATURE DEBIT. Seemingly similar, there are notable differences:

• Customer Identification 
• Signature Debit Cards are verified by the customer's signature on their sales receipt. Signature Debit Account come with all credit card processing accounts. 
• PIN Debit Cards require the customer to enter a personal identification number. If you want a PIN Debit Account, you will have to sign up for one with your credit card company as it goes with the PIN Network and not the credit card network. So in essence you have two different account on your statement! 
• Purchase Limits
• Signature Debit Cards are approved if the customer's credit limit has not been met or the card reported lost or stolen
• Pin Debit Cards are ONLY approved if there is enough money in the their bank account to cover the purchase.
• Transaction Authorizations
• Signature Debit Cards are approved through the credit card Brands Network such as Visa, Mastercard, Discover, or American Express. The customer will be approved based on the credit limit on each card.
• PIN Debit Cards are connected to pin ebit networks such as Interlink, STAR, Maestro, Cirrus, and many others. Debit network checks the bank account associated with that PIN Debit Card and only approves the transaction if there is enough money to cover the transaction at that moment!
• Merchant Services Pricing 
• Signature Debit goes through the Brands (Visa/MasterCard/Discover/American Express) and a merchant processing company to make purchases. Each of those entities charge for their services so traditionally, using or accepting payment with a credit card can be higher than with Pin Debit Cards.
• Pin Debit Cards typically include lower percentages than credit cards, but they come with higher fixed per-transaction fees. A merchant can save money by accepting Pin Debit for large sales but the customer has to have that money sitting in the bank account for that transaction to be approved! 
• Monthly Service Fees
• Signature Debit cards run through a Merchant Services Company like Merchant Processing Services and you can negotiate your monthly fees and rates. 
• Pin Debit Cards run through the PIN Network and have monthly fees that are Non-negotiable. 
• Payment acceptance
• Signature Debit can be accepted via a regular terminal, online, over the phone, via an Invoice in person or card not present. 
• Pin Debit Cards require a special Pin Pad machine that attaches to a terminal. Each transaction must be IN PERSON and the customer must enter a valid PIN into the Pin Pad device for the transaction to be valid and go through the PIN Network for a lower price. 

Signature Debit Cards

I would be remiss to not include the 2011 Durbin Amendment  and its impact over that last several years in the processing of Debit Cards. The Durbin Amendment caps debit card fees charged by banks with assets of more than $10 billion at about .05%. These are your large national banks Citibank, US Bankcorp, Bank of NY, Wells Fargo, etc. Smaller, local banks with less assets can charge anywhere from .05% - 1.25%.

Understanding if you should take Signature Debit or Pin Debit or both is vital to the success of your company. 

• Anything CARD NOT PRESENT (Online/Call Center/Invoice/Via Smartphone/Via App) are NOT considered eligible for PIN DEBIT! However, you can get Signature Debit and with the Durbin Amendment, most merchants recieve the benefit of the lower mandated fees! 

• Only Retail Transactions using a terminal and a PIN PAD with a PIN Network Connection will allow your business to accept PIN Debit properly. Remember, the customer must have the money in the bank for this transaction to be approved! NO BUY NOW, PAY LATER! 

Learn more about processing debit cards and whether your business should be set up to accept PIN DEBIT! Call Merchant Processing Solutions today! 

Merchant Processing Solutions Inc.
954-938-2420