What’s the difference between using a Credit Card and Debit Card from a Merchant’s standpoint?
One I know is that merchants are charged for using a credit card service but are they charged for using Debit cards?
And in some situations, if one pays in cash or Debit they will give the customer a discount.
in the UK I am charged for credit & debit cards accepted in my shop.
The rules do not allow me to offer discounts for cash & not cards, it is classed as discrimination againts card users.
Yes, merchants must pay for debit card usage as well. There are two different kinds of debit cards and how you are charged varies by each:
1) A PIN Based debit card
These are the debit cards where the customer has to enter their PIN number to complete the purchase. These cards are completely separate from credit cards and have a different fee structure. Typically the fee for accepting a PIN based debit cards is around 50¢ - 65¢ per transaction. The fee is the same regardless of how large the sale is.
2) Check Cards
These take money out of a user’s account just like a debit card does. But instead of entering a PIN number a user must sign for it just like it was a credit card. These cards work exactly like a credit card does for a merchant. The fees for these cards can be anywhere from 1.18% to 1.69% of the sale plus a flat transaction fee which can range from 19¢ to 25¢.
If you take high dollar transaction your business would be better off accepting PIN based debit cards as they will charge you less fees. If you take low ticket sales then check cards will cost you less.
I have linked to a calculator that can tell you which is better for your business.