![]() These newer forms of payment are increasing in use at a rapid pace. Some examples of this are Apple Pay, Google Pay, Venmo, CashApp, Cryptocurrencies, and loyalty programs to name just a few. With more millennials choosing alternative methods of payment (AMOP) over cash, debit, or credit cards, many business owners are analyzing how best to fulfill their customers’ payment needs. We recommend that you speak to a professional about which debit or credit card machine will best suit your business as well as what hardware will be needed, as everyone’s needs are different. What’s great is that these same terminals can also accept credit card transactions as well. In general, most businesses will need a payment terminal from which a customer can swipe, tap, or insert their debit card. Whether you run a brick and mortar store, online eCommerce business, or want to take payments over the phone, the right solution is out there. Terminals and Hardwareīased on your available payment options, there are many ways to process debit card transactions. All of these steps occur through the credit processing network in a matter of seconds. If the card has passed its maximum threshold, the transaction will be declined. If there is enough money available to cover the intended purchase, then the transaction will be approved. The payment processing company will also conduct a security check to prevent fraudulent transactions from occurring. It is the payment processor company’s job to relay the information to the customer’s bank and the merchant’s bank. When the credit card is run through the terminal, the information goes to a payment processor first. A bank will issue the consumer a card with a set spending limit. Credit card transactions use money that your customer borrows from the bank. If you are wondering how businesses accept credit card payments, this process is much more complex from the business owner’s perspective. Then, rather than inserting a PIN, the customer signs for the purchase. The amount typically clears in 1-3 business days. When the user chooses this method at the terminal, the card goes through the credit processing network and the funds are placed on hold. With this method, the money immediately comes out of their account and pays for the good and/or service. If the customer inserts their Personal Identification Number (PIN), the card goes through the debit card processing network. A debit card, as mentioned previously, simply withdraws money from your bank account, so it is important to know how much you have at all times in order to avoid any overdraft fees.Īs soon as a customer swipes their debit card at a terminal, the money can be taken out of their account in one of two ways: The Difference Between Debit and Credit Card Processingĭebit cards and credit cards work in two completely different ways. ![]() ![]() As a merchant, this keeps you protected during the debit card transaction. If there is indeed enough money, the bank will then run a security check and will approve the transaction if everything checks out. The bank will then verify if the account does indeed have enough funds and will confirm or deny the transaction if the consumer does not. ![]() This is because the processor needs to know if there is enough money in the customer’s account to cover the intended purchase of your goods/services. The card terminal will then read the card information and send it over to the customer’s bank for verification. One question you may ask is, “What happens after a debit card is swiped?” First, a debit card is swiped or inserted into your POS terminal, mobile reader, or virtual gateway. Afterward, the method of payment undergoes a process of verification and approval by a financial institution. Let’s get started! The Basics of Debit Card Processingĭebit card processing is when a customer makes a purchase with a debit card either online or in-person. To understand why accepting debit cards is so popular and why it plays an important role in your business, you first need to understand how it all works. But what takes place during a debit card transaction? As a business owner, it’s also important you’re familiar with debit card processing fees and how debit and credit card processing are alike. With more customers paying with debit cards and preferring this method more than ever, now is the time to ensure your business is set up to fulfill their needs. Today, we will demystify this concept together as we explore this method of payment processing. There are a lot of misconceptions regarding debit card processing in the payments space. Are You Ready to Offer Debit Card Processing?.Understanding Your Options When it Comes to Debit Card Processing.The Difference Between Debit and Credit Card Processing. ![]()
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