In a highly competitive economy, there is
no sense in gambling with your payment processing options; businesses
need every advantage to win in today’s global marketplace. Accepting
payments through customer debit cards increases the odds that the
customer who favors this particular payment option will be happy and
continually return.
There are two forms of debit card transactions and every merchant should have both.
1. PIN Based Debit
2. Signature Based Debit
PIN
based debit is also called “online debit” because the transaction is
conveyed electronically at the point of sale. The customer confirms the
sale by keying in their personal identification number (PIN), and the
funds are immediately captured through a nationwide EFT network from
the customer’s bank account. The funds are deposited into the
merchant’s account in 2-3 business days for a nominal per item fee.
The
service is much more cost effective than credit card transactions, and
PIN based debit card use is becoming an extremely popular option
because of its safety and security. People who use this option don’t
have to carry around a lot of cash, and they get to see the details of
their transactions in their bank statements. The default on your
point-of-sale device should be set to PIN based.
However, if a
customer prefers, there is signature-based debit also called “offline
debit” and this is another well-liked payment option. The customer uses
their Mastercard or Visa Check Card just like a credit card. The card
is swiped and the point of sale device gives a draft for the customer
to sign. The funds are transferred to the merchant’s bank account.
Discount rates apply with this option, as well as a small transaction
fee. Chargebacks are also possible. Many young people are using these
cards because it gives them the convenience and clout of a credit card.
They can also be used to purchase over the Internet. If a merchant can
accept credit cards, they can usually accept signature-based debit
cards.
Riding the Wave
Even the Federal government is
singing the praises of debit card use for consumers. Please see the
consumer guide: “Are You Riding the Debit Card Wave?”
Debit
cards are seen as safer than cash and more convenient than checks. So
make room next to your cash register for a debit terminal, PIN pad and
printer, and reduce the risk that a customer may not have the right
payment option when the impulse to buy is upon them.
There’s
virtually no risk in accepting PIN based-debit card payments, so make
sure it’s an option at your cash register. It’s a sure thing!
Rick David writes for a Merchant Newsletter @
Merchant America. He
also writes a humor column called,
"Don't Laugh It Could Happen To You" for
http://sandiego.merchantamerica.com.
Republished from GoArticles