What Is Debit Card Processing?
Consumers don’t always carry cash, and if they do, it’s typically an insignificant amount – enough to buy a coffee or make small purchases; however, you’d be hard-pressed to find someone who didn’t have a form of plastic on them. A majority of American consumers prefer to use debit cards over credit cards as a way to control their finances and avoid debt.
Debit cards can be used to pay for mostly anything – from pay-at-the-pump to in-store purchases to online sales. Whether you run a business or operate a financial institution, let First Data help you increase customer retention, grow profitability, and improve operational efficiencies with our convenient debit card processing solutions. Our team of experts can help you with the latest POS systems and credit card machines for your brick-and-mortar, set you up with debit card processing for your e-commerce website, or even equip your financial institution with feature-rich ATMs.
The Basics of Debit Card Processing
Debit cards look exactly like a credit card. They may say “debit” somewhere on the front of the card, but for the most part, there is no difference visually. The key differentiator is where the funds derive. With a debit card, payment is linked to the cardholder’s bank account and the amount is deducted from their account balance, not a revolving line of credit.
Here are three different types of debit card processing:
- PIN Debit - Cards are programmed with a personal identification number (PIN) to protect cardholders, merchants, and banks from fraudulent payments.
- Signature Debit - Cardholders sign a receipt or the signature screen of the POS. Instead of being routed through a debit network, like STAR®, transactions are sent through the Visa, Mastercard, or Discover network.
- Contactless Debit - Customers wave or tap their card, wearable (smart watch), or mobile device over a near field communication (NFC) terminal that communicates with the radio-frequency identification (RFID) technology in the card or device. With a wearable or a mobile device, the debit card is linked to a mobile wallet, such as Apple PayTM or Android PayTM. The transaction moves through the debit network just as it would with a PIN debit purchase.
How Debit Card Processing Solutions Work
Our debit card processing solutions provide the convenient payment options your customers need with the security they expect. When making card-present purchases, customers must enter their PIN into a terminal or PIN pad if they choose to process as a debit. Or, they may also run the transaction as a credit, which will only require a signature. Depending on the POS system, the merchant or cardholder is given the choice as to how to process the transaction.
If a PIN is used, the card account information is routed to a debit network, such as First Data’s STAR® Network. The issuing bank confirms the cardholder has available funds in their bank account to complete the purchase, and the debit network handles authorizing, clearing, and settling the transaction to the merchant.
Services That Tie to Debit Card Processing
Time is a rare commodity, and your customers are constantly searching for ways to get more of it, including how they pay for purchases and access their money. By offering innovative features at the point-of-sale (POS) or ATM, you help your customers conveniently and securely manage their funds and reduce time spent waiting in lines.
As the leader in ATM solutions, First Data drives all ATM makes and models, which provides cost-effective gateway access to all leading ATM/POS networks and card associations. With end-to-end transaction processing, driving, monitoring and routing, we help you provide continuous and safe access for your cardholders. Whether you prefer to manage all of your ATM program, or outsource it, we provide you with the performance tools and managed services you need to drive profitability.
Providing convenient access at over two million retail POS and ATM locations coast-to-coast, the STAR® Network is the second largest PIN debit network by transactions. First Data helps increase your revenue and transaction volume, while giving your cardholders more functionality and features like surcharge-free ATM access, expedited transfers, and industry-leading fraud protection. With 99.9% up-time, our STAR® Network offers real-time account management, deposit sharing, universal integration for back-end efficiency, and biller-direct payment options.
EMV and Magnetic Stripes
EMV chips are being added to debit cards to provide an extra layer of security at the POS that the magnetic stripe can’t offer. The chip and PIN combine to authenticate a user and minimize the risk of fraudulent and counterfeit transactions.
If you are a financial institution looking for a debit card issuer, First Data can help you provide magnetic stripe or chip cards using our customized digital printing services. Additionally, we work with many merchants who need to accept debit cards by offering POS systems and desktop and virtual terminals equipped with state-of-the-art technology to accept chip, contactless, and magnetic stripe debit card transactions quickly and securely.
Why Do You Need Debit Card Processing?
Today’s consumers want flexible payment options and convenient access to their money anytime, any day. As the preference to use a debit card at a POS or an ATM grows, offering the latest technology and services, coupled with advanced security, is key to increasing customer retention and generating more profit.
From payment transactions to ATM programs, connect with our team of experts today to learn about the debit card processing solutions that complement your small business or large business, or debit card issuing services for your financial institution.