Auto dealer pin debit vs signature debit cost comparison 2012 and technology influence

Does pin debit still matter in a post-Durbin Amendment credit card processing world? Yes, and technology can make a huge difference. This example shares how much money auto dealers will save based on two different sales amounts. In addition to pin-debit as a transaction type, routing to the lower cost pin debit network can also reap substantial savings.

Cost Comparison Analysis for Signature versus Pin Debit effective 9/2012 with an average $200 ticket

Average Ticket Debit Card Markup Credit Card Auth Fee Pin Debit Auth Fee Signature Debit Cost Pin-Debit Cost Savings % savings
Regulated Debit $225.00 0.0500% $0.04 $0.10 $0.75 $0.47 $0.28 37.13%
Non-Regulated Debit $225.00 0.0500% $0.04 $0.10 $2.59 $2.35 $0.25 9.60%

Cost Comparison Analysis for Signature versus Pin Debit effective 9/2012 with an average $25 ticket, common for oil changes. 

Average Ticket Debit Card Markup Credit Card Auth Fee Pin Debit Auth Fee Signature Debit Cost Pin-Debit Cost Savings % savings
Regulated Debit $25.00 0.0500% $0.04 $0.10 $0.33 $0.37 -$0.04 -12.37%
Non-Regulated Debit $25.00 0.0500% $0.04 $0.10 $0.47 $0.55 -$0.07 -14.98%

Merchant Discount is the basis points you pay your merchant processor. Your discount may vary.


  • .9% pin debit network rate used in this example. Debit network rates vary and under new regulations, all debit cards must offer two networks for processing.
  • Visa/Mastercard dues and assessments apply to signature debit, but not pin debit.
  • Regulated cards average 65-70% of all debit card transactions
  • With your current credit card terminals, who decides whether to prompt customers for pin debit or signature debit?  Is that the best option for you to control costs?
What is your pin debit costing you now? For non-regulated debit example, did you know that Interlink has a special pin debit rate for business cards of  1.70% + $0.10, but Pulse does not? Their retail rate is 0.85% + $.18. Under the Dodd-Frank act, all debit cards must have two network options for merchants to choose from, but there’s no way for the average cashier to know which one will cost less. If there’s one thing that certain, it’s rates will continue to change and get more complicated.
What percentage of eligible debit transactions are you converting? How long does it take for you to figure that out?

Why do dealers need debit routing technology?  It’s evident from the above examples that merchant costs vary depending on multiple factors. The fact is that leaving it up to employees to make decisions about pin debit is not going to result in the greatest savings to the dealership. With our SaaS technology, the intelligent payment engine will dynamically route transactions based on internal intelligence, plus rules you create.  Do you always want the lowest cost? Or do you want to reduce risk even if it costs more? (Consumer dispute period is 14 days on pin debit vs 120 days for signature debit.)

DEALER COMMENT: I already use a virtual terminal in our dealership.

CHRISTINE:   What is your average pin debit penetration? Do you know? How easy is it to find out? Does your virtual automatically route to the lower cost debit network? What percentage of your transactions qualified for the best qualified rate possible? A virtual terminal often works just like your old dial up terminal- it has no intelligence and does very little to help merchants reduce costs or mitigate risks.

DEALER COMMENT:  How will I know if your routing technology works?

CHRISTINE: Our merchant portfolio averages 76% of all eligible debit transactions converted to pin debit. Merchants have this information in real-time by user, by store/department, by enterprise. Additionally, some dealers choose to have a report emailed automatically if the percent falls below a certain rate. This alerts them of a potential hardware or other problem. The executive dashboard has many easy to read graphical and downloadable key metrics that auto dealer groups have asked for. Additionally, you can create and distribute custom reports on any metric to a distribution list on any schedule. You can also dig into your merchant statement.

DEALER COMMENT: We don’t want to change processors.

CHRISTINE: You don’t need to. We’re processor agnostic and connect to all the major processors.

DEALER COMMENT:  What’s involved to get set up? How much does it cost?

CHRISTINE:  Most dealers choose to use a signature capture terminal. You can buy from any source, or we’ll help you get them wholesale. Cost varies by dealer, with pricing on a transaction basis. Dealers rarely choose our  CenPOS payment technology for cost savings. It’s just one more benefit- efficiencies and reporting are the two key reasons auto dealer groups use our technology.

Contact Christine for more information on pin-debit routing solutions.








How does card reader and pin debit pad with Skipjack compare to CenPOS?

Credit card processing is evolving from dial up terminals to web based virtual terminals, even for the retail environment. These hosted solutions are not all alike. Addressing just the pin debit function for payment processing, CenPOS and SkipJack perform differently. The hardware set up for each in this scenario is a virtual terminal, magnetic stripe card reader and pin pad.

  • The Skipjack user must look at the consumer card and ask if it will be ‘debit or credit’.
  • The CenPOS user will automatically prompt the customer for their pin number IF it fits the merchant settings.

What’s the difference?

With Skipjack, employee decisions at the point of sale impact merchant risk and cost of accepting credit cards. With CenPOS, the customers and employees are prompted automatically to achieve the desired result at the point of sale. CenPOS is an intelligent payment platform that routes transactions based on merchant settings for risk tolerance and payment costs.

Statistically, CenPOS merchants achieve a national average of over 75% pin debit conversion. Merchants can verify this information for their account in the executive dashboard, and also create alerts for their conversion rate, such as if it falls below a certain percent.  While I don’t know other product statistics, published reports of aggregate retail merchants are substantially lower- less than 30%; most businesses I encounter  have under 10%.

What’s the merchant benefit to increase pin debit conversion?

  • 14 days for a dispute period vs 120 day for signature debit.
  • Tougher to lose disputes.
  • Dues and assessments do not apply.
  • Additionally, the Durbin Amendment requires 2 debit networks on every card. With CenPOS least  cost routing, the debit transaction will be routed to the lower cost network, according to all applicable rules.

DISCLAIMER: This review uses publicly available information posted on the competitive product web site as of 7/01/2012. The article does not address all features, just the pin debit conversion. Skipjack is a registered trademark of Skipjack Financial Services, Inc.


  • According to their web site|4347063|2831168, “PIN-based debit is currently available only for Canadian merchants.” However, I don’t think that is accurate.
  • Regardless of the features you need, CenPOS generally outperforms Skipjack when all the facts are compared, especially for automotive and business to business applications.
  • API is available to integrate into ERP and other software packages.


Contact Christine Speedy of 3D Merchant Services, authorized CenPOS reseller.  Click here to become a customer or call the hotline at the top of this web page.

MasterCard new annual merchant fee excludes pin-debit volume

Following Visa’s new merchant fee announcement, MasterCard will launch a new annual fee for acquirers on July 1, 2012. No specifics of the fee has been released, however, it will be based on credit-card volume and pin-debit volume will be excluded from the calculation.

Once again, CenPOS retail customers will have another advantage at escaping increased fees. CenPOS pin debit conversion rate averages over 75% across all USA markets. Pin-debit also mitigates merchant risk with only a 14 day window for consumer disputes vs 120 days for signature debit.

About CenPOS : “Creating efficiencies through payment innovation”

Founded in 2009, Miami-based CenPOS is a payment technology provider committed to providing its customers and partners with innovative solutions for today’s rapidly evolving consumer payment choices. CenPOS is an intelligent payment-processing network that streamlines the payment experience for businesses and consumers by using state-of-the-art technology to replace inefficient, outdated payment systems.

CenPOS sales: Christine Speedy direct (954)942-0483


Merchant methods to leverage US vs Visa, Mastercard settlement

How can merchants use the US vs Visa and MasterCard settlement to lower  costs and improve EBITDA? Most believe the most critical element to any solution is knowing exactly what merchant fees are for cards presented. Thus while the settlement is a huge win for merchants, The Federal Reserve Bank of Boston concludes merchants do not likely have the information or capability to fully take advantage of the new rules. IN this article I’ll review how merchants can use our CenPOS technology to leverage the new rules, without needing  to decipher the interchange rate for every transaction in real time.

Note that American Express did not participate in the settlement, thus any suggestions do not apply for their brand.

This is an excellent article and I recommend reading it. Federal Reserve Bank of Boston Public Policy Discussion: An Economic Analysis of the 2010 Proposed Settlement between the Department of Justice and Credit Card Networks. Excerpts:

In 2010, the Department of Justice (DOJ) filed a lawsuit against the credit card networks American Express, MasterCard, and Visa for alleged antitrust violations. We evaluate the extent to which the recently proposed settlement between the DOJ and Visa and MasterCard is likely to achieve its central objective: “…to allow Merchants to attempt to influence the General Purpose [Credit] Card or Form of Payment Customers select by providing choices and information in a competitive market.” In word and spirit, the Proposed Settlement represents a significant step toward promoting competition in the credit card market. However, we find that merchants are unlikely to be able to take full advantage of the Proposed Settlement’s new freedoms because they currently lack comprehensible and complete information on the full and exact merchant discount fees for their customers’ credit cards.

The basic problem is that merchants currently lack sufficient information to disclose fees or differentiate their prices according to the method of payment. In theory, the Proposed Settlement would allow merchants to try to steer consumers toward lower-cost payment instruments by disclosing the fees merchants incur in accepting payment cards, and by offering enhanced discounts. In practice, however, merchants may not be able to use these privileges effectively because they may not know the exact merchant fee on each credit card until long after the transaction has taken place, and even then merchants typically learn only their aggregate monthly fees and not the specific fee for accepting a given card. Interchange fees—which account for the bulk of merchant fees—range from below 1 percent to over 3 percent. Merchants may be aware of this range, but they currently do not have all of the information they need to enable them to match an individual credit card presented by a consumer to the corresponding merchant fee for that card. Therefore, merchants would not be able to disclose the relevant card fees to their customers or to completely and accurately differentiate prices across payment instruments.

If merchants had the necessary information in real time (that is, at or before the time of the transaction) to facilitate the mapping of cards and fees, under the Proposed Settlement they could attempt to steer customers toward lower-cost payment methods. However, merchants would still be restricted in the mechanisms they could use to this end because the Proposed Settlement did not challenge the Visa and MasterCard rule that prohibits merchants from imposing surcharges that reflect the costs they incur in processing payments.

End excerpts.

The new rules, together with Dodd–Frank Wall Street Reform and Consumer Protection Act, empower merchants with new flexibility to manage costs. The industry response is that only the biggest of merchants can benefit from the settlement. But that’s not true. Our technology enables merchants to provide discounts right now.

Ideas to reduce payment processing costs based on new rules:

  1. Check your merchant agreement schedule A. Does it state anywhere on the agreement “pass through interchange”. If not, your options to reduce fees may be limited.
  2. Put up a sign for a minimum charge amount. (Minimum cannot apply to debit cards.)
  3. Put up a sign informing customers of really basic information. For example,  you could put up a sign “Please help us keep costs low by using your debit or check card. For every $100 sale our costs average: Cash $0, Debit/ check card $.90, credit card $1.85, rewards card $2.50.”
  4. Implement our CenPOS technology and offer discounts based on rules you set. For example, do you want to offer a percent or a flat amount? Do you want to offer the rule only if they use one card brand such as Visa? Only over a certain amount? Only on certain days? The options are endless and can be remotely managed in real time, completely removing cashiers from any part of the discount process.
  5. Identify your average ticket and average cost per transaction. Test and measure different incentives to customers using CenPOS.
  6. Implement CenPOS technology in a retail setting and steer customers to enter their pin number, reducing risk of chargebacks. The 2010 national average for pin debit penetration was less than 29%; CenPOS users averaged 74%.

Considerations for offering incentives of any type or payment steering.

  • Do you know what percent of your transactions are debit right now?
  • Do you know what percent of your transactions are any type of card right now?
  • Do you know your average cost per transaction on debit? On other card types?
  • Do you know if card type usage is cyclical by time of day, day of week, location of your facility, or how payment is accepted (retail, online etc)

CenPOS technology provides real time information about all of the above so you can manage how and what type of discounts to offer. Merchants can use integrated check and ACH services with CenPOS.

CENPOS SALES: Call the credit card processing hotline at the top of the page for direct merchant sales, ISO sales, and other 3rd party reseller sales.






CenPOS newsletter on mobile payments, check processing, ACH

March 2011 3D Merchant newsletter reports on CenPOS mobile platform, ACH, check processing and other hot topics.  CenPOS continues to lead the entire industry as THE single solution for merchants to accept payments of all types, deliver time-saving comprehensive reporting, and offer least cost routing, eliminating errors that result in higher interchange fees.

With the Durbin Bill enactment just a few months away, merchants are scrambling to prepare for expected lower cost debit fees. The open public comment period is now over, the final details are in committee, and the Federal legislation will go into effect July 1, 2011.

CenPOS customers averaged 75% pin debit vs. signature debit in 2010, almost double the national average for non-CenPOS customers. If a proposed two-tier debit price system evolves, CenPOS customers will be in the optimal position for lowest processing costs.

The new CenPOS Mobile platform is currently running on the Apple line iPhone 3 and 4,iPad and iTouch. CenPOS fully supports card swipe as well as signature capture on the telephone device.

Click image to download the 2.8 MB PDF March 3D Merchant and CenPOS newsletter on mobile payments, ACH, and check processing.

3d merchant newsletter

3D Merchant and CenPOS March 2011 newsletter

About 3D Merchant Services: 3D Merchant Services is a marketing and consulting enterprise and does not issue merchant agreements. Owner Christine is a direct agent for merchant products and services offered, including CenPOS, where she reports directly to the CEO.