What are debit card payment processing costs?

What does it cost to process a debit transaction? A pin debit transaction? Why should you care? There are many complexities to answer the question and the chart below provides a simple way to help you compare costs. This chart can help you make decisions about which merchant terminal to choose because you can see the impact of using different payment processing types.

If you’re not familiar with the different types of debit transactions, listen to my podcast how to increase pin debit for merchants. It contains an overview before delving into specifics about increasing pin debit penetration. A  pin debit transaction occurs when the customer is present and enters their pin number. Merchants need a PED or Pin Entry Device to accept pin debit transactions, and by July 2010, all PED devices must be Triple DES certified.

Fee schedules for debit are varied and just like interchange for credit cards, it’s getting more complex all the time. The most basic interchange and debit network fees are in the chart below:

% per transaction
interchange per transaction
cost per $100k
retail debit (Visa card swiped)
1.03%
$0.15
$1,330.00
key entered- card present- user must get an imprint of the card and sign
1.60%
$0.15
$1,900.00
pin entry debit
0-.75%
$.25 and up
$1,700.00
ecommerce or card not present
1.80%
$0.10
$2,000.00
amount
$100,000
avg per transaction
$50
# trans/100k
2000
pin debit avg*
$0.85
* for this example

See also the related article  Compare wireless payment solutions for silent auctions, January 2010 and podcast how to increase pin debit for merchants.

By understanding the basic differences in pin debit costs, a business can analyze their situation to assist in decision making for:

  • human resources- who needs more training?
  • comparing hardware ROI
  • software and related POS decisions
  • payment processing analysis and changes needed
  • balancing risk

With pin debit transaction costs now on the rise, it’s also important to understand other values of pin debit, namely that there is no risk of future chargeback.

3D Merchant provides detailed pin debit analysis for customers processing $1 million per month and up. For these merchants, the analysis will identify specific opportunities to improve interchange qualification, convert debit to pin debit, and deliver an ROI for CenPOS. CenPOS is a payment processing platform with a multitude of essential PCI Compliance, cost reduction, and fraud prevention tools larger businesses need.