Debit card processing should be part of what your business offers. Not everyone has a credit card or would like to pay with one. They like the convenience of a debit card and the funds coming out of their checking or savings account. In other situations, it is a pre-loaded debit card with a set amount of money on it. Consumers trying to reduce their debt avoid using credit cards so they aren’t paying interest on the purchases or reducing their credit score.
A PIN debit card is an additional step for safety and security. It can be set up both online and for in-person transactions. With a typical debit card processing format, the card number is entered or the card is swiped. Once it is approved the purchase is authorized. The PIN debit setup adds a second layer to the transaction. The customer must enter a four-digit PIN number.
When you set up your debit card processing, it is a good idea to have the PIN debit in place. The downside to this is not all customers have a PIN for their debit card. They may have to use a different card for payment at that time. They can always request a PIN from their card issuer online or by phone.
Reduce the Risk of Fraud with Debit
PIN debit is appreciated by customers as it helps reduce fraud. A card may be stolen or it was lost and someone who found it tried to use it. When a PIN is required, they can’t complete the transaction. The only time they can do so is if they knew the person and their PIN or they guessed it because it was the person’s birthdate or other easy-to-figure-out sets of numbers.
The same is true for online purchases. A card number can be compromised due to hacking or other scenarios. Without the PIN though, the card can’t be used successfully to complete a purchase. This gives customers peace of mind when they buy from your business. It shows them you take security seriously and making an effort to help keep their information protected.
What does PIN Debit Entail?
As a business owner, you must know what all of this entails before you put it in motion. The process involved as well as the fees associated with such processing often depend on your merchant account provider. It also depends on the equipment you have for in-person transactions. Some merchant account providers give you a discount with this additional layer of protection in place. You pay less for your transaction fees because you take steps to improve security.
Other merchant account providers charge you more for transactions where the customer enters a PIN debit card for payment. Those extra fees can add up quickly. Always find out what the options are and exactly what you will pay. Do you come out better or worse by adding this feature? If you have to pay to buy or rent more expensive equipment that should be factored into your decision too.
Durbin Amendment
As a business owner, look at the Durbin Amendment. It has a limit for transaction fees relating to PIN debit card transactions. This is the maximum amount you can be charged for such a card being used for purchase. Of course, you should strive to find a merchant provider offering low-cost debit card processing, exceptional services, and top-of-the-line equipment. This ensures a smooth process without high overhead for the business to cover.
The Durbin Amendment is encouraging because it lowers fees for PIN debit transactions. This helps consumers obtain lower prices. When a business can reduce overhead, they often pass along the savings to their customers. Everyone wins with this type of debit card processing in place. However, you have to watch out for unethical merchant account providers. They know they can’t cross the line with the charges on PIN payments.
To get around this, they have added various charges, surcharges for this and that, or even account handling fees. Such charges are legal but they certainly aren’t appealing from the business owner’s point of view. Sadly, many business owners believe they have to pay those fees so they don’t shop around for the best provider. Others don’t look at the breakdown of costs, so they are oblivious to what they really pay for.
Always verify the fees involved before you apply for an account with any merchant provider. They should fully disclose the debit card processing, what you pay for, a breakdown of all the fees, and give you answers to any questions you may have. Look at reviews from other businesses too. Who are they happy with and who do they complain about? Such details can put you on the right path to finding a great merchant account provider.
Don’t get Backed into a Corner
You have more control over your card processing options than you may realize. By law, you have to have at least two options given by a merchant account provider. They can’t back you into a corner and require you to use a specific network for processing. They should offer one specifically for PIN debit cards because that gets you lower fees for those transactions than a non-PIN card.
Don’t be afraid to ask a potential provider about the routing and how it is distinguished. This information can save you plenty of money for card transaction fees. That is money your business gets to keep as profit rather than putting into someone else’s pocket. Find a provider willing to grow with your business and with integrity, not just a desire to make them money.
Dive into the background of a given merchant provider before you work with them. Verify there is no conflict of interest with how they route payments and the services they offer to you. It doesn’t make sense for them to get paid twice for the same transaction! Verify they have current routers and current equipment designed to route the transaction accurately. The data they share with you in reports should give the breakdown for PIN debit transactions too.
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