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Debit Card (Visa Check Card)

Is a merchant charged for use of a debit card? Difference from credit card?

2:22 pm on Nov 27, 2006 (gmt 0)

WebmasterWorld Administrator webwork is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I'm of the impression that a business is not charged a fee when I used a check card or debit card.

Am I wrong?

What is the difference in charge, if there is one, between a debit card and a check card?

It seems to me that if there is a transaction fee the merchant charge for accepting a debit card should be less, but maybe I haven't fully explored why this conclusion is valid (or not). Comments?

2:29 pm on Nov 27, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

I think we pay the same fee for debit cards that are tied to credit cards. I cant see Visa or M/C not charging for using their cards.
2:38 pm on Nov 27, 2006 (gmt 0)

WebmasterWorld Administrator webwork is a WebmasterWorld Top Contributor of All Time 10+ Year Member

That's both interesting and unexpected, as the checkcard purports to serve substantially as a paperless check.

Are merchants charged processing fees for processing paper checks? I don't think so.

The benefit to the bank, where the account is tied to the checkcard, is that they have 1 less check to process. I always figured that processing payments - via a cash account, electronically - would be less burdensome and therefore less expensive to the bank.

I also had it in mind that Visa/MC is basically "a bank thing". In other words, an entity in service of the banking (moving money around) industry that is either owned or controlled by interests tied to or overlapping with bank ownership.

Lastly, since debit cards are tied to actual funds (not credit) I thought any charge would naturally be less since the risk of non-satisfaction of the debt are eliminated. If you don't have funds in an account to cover the debit the transaction fails.

Fascinating. If the charge is exactly the same to the merchant as a actual check then this is a bit of a screw job. I guess it's time to put away the checkcard if that's the case.

[edited by: Webwork at 2:40 pm (utc) on Nov. 27, 2006]

8:05 pm on Nov 27, 2006 (gmt 0)

10+ Year Member

As with any merchant account charges will differ from provider to provider but here are the basics....

The basic difference between a debit card and a check card is that a debit card requires the use of a personal identification number (PIN) to validate and subsequently process a transfer of funds directly from a customer account to the merchant.

A check card can function as a debit card in the way that a customer can use a PIN and also as a check card where funds are moved via clearing house similar to a traditional bankcard.

There is less risk to acquiring banks when a check card is used since funds are already present in the customers account. In effect, the customer is not borrowing on credit but instead paying with electronic cash. Therefore, the ACH processing fees still apply, however, the interchange is less making the discount rate less.

In short, if you SWIPE a check card through a terminal most merchants will enjoy a lower fee. If you accept a check card in a card not present situation (like a web site) you will most likely be charged the same fee as a traditional bankcard.

I have an interesting article on the subject but hesitate to post the link…. I can sticky if you’d like.

11:17 pm on Nov 27, 2006 (gmt 0)

WebmasterWorld Senior Member leosghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

Also it depends on where you are paying from ( where the card was issued )..my debit / check card costs me 29 euros per year to own and when buying outside the euro zone there is a one euro per transaction charge ( irrespective of the actual amount be it 5 dollars or 5000 dollars that I'm spending ) to me on it for currency conversion ..

if I spend in the euro zone the transaction is free and I pay just the price announced at the merchants site or wherever ..

if you pay me via your credit card from a non euro zone or even from a euro zone country ..My bank will charge me 3.5% of the transaction or they have sliding scale where I may be charged 8 euros per "tranche" of $500.oo that I receive ..

edited for typos ..

[edited by: Leosghost at 11:23 pm (utc) on Nov. 27, 2006]

4:12 pm on Nov 28, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Most of the time we don't even know its a debit card. You can not tell the difference between a Visa card number and a Visa-debit card number.

Its basically just a secured credit card. If you do any US business, you are likely getting them all the time.

4:43 pm on Nov 28, 2006 (gmt 0)

10+ Year Member

In the US, many retail merchants like grocery stores prefer you to use Debit rather than Credit. Often when paying with a credit card you'll swipe your card, hit "Credit" not "Debit", then it will ask "Do you want to use your PIN?", you say "No" and then it will again ask "Credit" or "Debit".

If merchants pay $1 or even $0.50 less per transaction for Debit then you can understand why they want you to use your PIN!

4:55 pm on Nov 28, 2006 (gmt 0)

10+ Year Member

Using worldpay in the UK we get charged a flat 50p per transaction on debit cards and a % on credit cards