Debit Card Processing

PIN Debit, Signature Debit and Online Debit Secure Solutions

Premium Card Solutions offers comprehensive debit card processing so your customers can use their bank ATM cards and check cards to pay for goods and services. Debit cards currently account for approximately 65 percent of all payment transactions, so it makes good business sense to provide your customers with the benefits of debit processing.

What Is Debit Card Processing?

Debit card processing permits a merchant to accept a consumer debit card linked to that consumer’s checking or savings account.

Premium Card Solutions works with merchants to get that transaction to the consumer’s card-issuing bank for approval of the purchase or bill payment transaction.

Accepting Debit Cards

Debit is the most preferred method of payment by consumers today.

Debit is most popular in the 25 – 40-year-old segment of the population. Accepting debit cards costs less to the merchant than other types of payment. In addition, PIN debit fraud is lower than any other method of payment, thereby, more than justifying the cost of “PIN pad” equipment. The consumer trend over the past several years has been to pay with personal bank funds as opposed to lines of credit, and this trend is expected to continue.

Primary Types of Debit Card Processing

Learn the differences between PIN Debit, Signature Debit, PINless Debit and Online Debit.

• PIN Debit: Used in a retail environment, consumers select debit at the point of sale and enter their PIN (Personal Identification Number).
• Signature Debit: Can take place at a retail location or an online Web site. Transactions are routed through the credit card networks (e.g., Visa^® and MasterCard^®) but are paid using a consumer’s funds on deposit in their checking or savings account.
  No entry of a PIN is required for a signature debit transaction. As a result, there may be a heightened risk of fraud, and typically a higher interchange rate is charged to the merchant.
  According to The New York Times, PIN debit is generally the lowest-cost type of debit payment from a merchant perspective. The New York Times also states that the difference between signature debit and PIN debit fees are significant enough that some large retailers “…steer customers to use a PIN, the debit norm outside of the United States.”*
• Online Bill Payment (also known as PINless Debit): A debit payment type used by certain Web-based merchants that have established some type of contractual relationship with the consumer and, therefore, know their identity.
  Wireless providers are the largest merchant category using online bill payment. Consumers may pay cell phone bills online using a PIN debit card, but without being required to enter a PIN. Since consumer identity is already known, interchange rates are generally lower than card-not-present signature debit.
• Online Debit: The most recent introduction of debit payment types is that of online debit. There are currently two methods of online debit supported by the PIN debit networks. The first method requires a consumer to use a PIN debit card and enter their PIN online in a secure manner.
  The second method, also using a PIN debit card, requires the consumer to log into their financial institution’s online banking site to obtain authentication. This transaction type is in its infancy and currently the interchange expense to the merchant is less than that of card-not-present signature debit.

*Martin, A., (2010, Januray 10). How Visa, Using Card Fees, Dominates a Market. The New York Times.

Access to All Major Debit Networks

Sixty-five percent of all payments in the United States today derive from the use of a debit card.

Debit card transactions grew approximately 17 percent in 2010 and will grow another 15 percent in 2011. Premium Card Solutions provides access to all major debit card networks including:

• ACCEL/Exchange^®
• Alaska Option^®
• AFFN^® (Armed Forces Financial Network)
• Credit Union 24^® (CU24)
• Interlink^®
• Jeanie^®
• Maestro^®
• MasterCard^® Debit
• NYCE^®
• PULSE^®
• SHAZAM^®
• STAR^®
• Visa^® Debit

Call us or contact us online to learn more about debit card acceptance options offered by Premium Card Solutions.