What Is a Debit Card?

A debit card looks a lot like a credit card but lets customers use money from their bank accounts to make a purchase or get money from an ATM.

As a merchant, it is important to understand the two ways debit cards are processed:

• With a PIN pad: This method works much like entering a PIN (Personal Identification Number) into an ATM to get cash from your bank account. The debit card is swiped through a merchant's terminal and then the customer enters his or her PIN on a PIN pad, which is attached to the terminal. Since the PIN is known only by the customer and is verified by the bank, the risk of fraud is lower than it is for credit card transactions. This lower risk translates into lower fees for the merchant. This is also called an online debit transaction.

  Our services that let you process debit cards with a PIN pad:

  • QuickBooks Merchant Service for Terminals
  • QuickBooks Point of Sale Merchant Service

• Like a Credit Card: Debit cards that have a VISA or MasterCard logo on them can be swiped through a terminal or card reader just like a normal credit card. Instead of using a PIN (Personal Identification Number), the customer signs a receipt, just like a credit card sale. Since the level of risk is the same as it is for a credit card sale, the merchant pays the same rates for this transaction as with credit card transactions. This is also called an offline debit transaction.

  All merchant services let you process debit cards just like credit cards:

  • QuickBooks Merchant Service for Terminals
  • QuickBooks Merchant Service for PCs
  • QuickBooks Point of Sale Merchant Service

How Much Cheaper Is It to Use a PIN Pad?

Since there's no discount rate charged for PIN pad transactions, you could save a lot of money. Below is an example* of just how much you could save if you do $10K in monthly sales:

Example	Debit Card	Credit Card
Monthly number/volume of transactions	100 transactions x $100 avg. transaction = $10K	100 transactions x $100 avg. transaction = $10K
Per transaction cost	$1.08 (includes $0.23 per transaction cost, plus an average of $0.85 in network fees1)	$0.23
Discount rate	None	1.72%2
Cost per month	$108	$195
Annual cost	$108 x 12 = $1,296	$195 x 12 = $2,340
Annual savings	$2,340 - $1,296 = $1,044!

Have questions? Call (888) 535-5490.

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* The savings calculation above is an example only, used to demonstrate potential savings when processing a transaction via PIN debit instead of a credit card. Actual usage of debit and credit cards and the savings from it will vary.

1. The $0.85 Network Access Fee used in this calculation is an example only, based on an average of approximately 0.70% of the transaction plus an average of $0.15 per transaction. Actual Network Access Fees will vary depending on the Network Access Fee provider and transaction amount. For more information on Network Access Fees, click here.

2. The discount rate is based on a "Card-Swiped Rate" of 1.72% for QuickBooks Merchant Service for Terminals service. "Card-Swiped Rate" of 1.72% applies to qualified swiped Visa/MC transactions that are electronically authorized.

Click here for additional terms and conditions by service.