REPLICA PAYMENT PROCESSING AND
DEBIT CARDS
To accept payments
through credit cards from customers the
merchants need to have a payment
processor associated with them. Usually,
this means that the merchants should
have a credit card merchant account. If
he has a merchant account the merchant
will be able to accept payments through
the major cards like MasterCard and
Visa. The biggest drawback of the
merchant account is the cost associated
with it. A merchant account has many
types of fees that have to be paid at
different intervals of time ranging from
per transaction to per month to per
year. Depending on the contract, the
fees will more or less eat in to your
business profits.
The trend with the
consumers is also changing. More number
of people is using their debit cards to
pay for the items that they purchase.
While most of the merchants are aware of
the fact that transactions with the
debit card will attract lesser fees than
credit card, most of them are not aware
that there are several types of
transactions with the debit card also,
each attracting a different fee. The
rest of this article will explain how
accepting a debit card is different from
accepting a credit card. You will also
learn the ways you can make your fees
lesser.
Debit Card Processing
versus Credit Card Processing
The primary difference
between payments made through credit and
debit card is that when a consumer uses
his credit card the amount will be
deducted from his line of credit and
when he uses the debit card the amount
will be deducted from his bank account.
The primary reason for lower fees and
rates with the debit card is: with the
debit card, the amount will be deducted
directly from the card holder’s bank
account thereby posing no risk for the
bank. Therefore, the banks or the debit
card issuers offer lower rates and fees.
What exactly is the
“Direct Debit Transaction”?
The end result of both
the normal and the direct debit
transactions is that money is
transferred from the card holder’s bank
account to the merchants business
account. But, the difference is the way
they are processed. With the normal
debit card transactions the process has
to go through a merchant account in a
way similar to that of the credit card.
However, the “Direct
Debit Transaction” goes via the ACH or
Automated Clearing House network, which
means that the money is directly
transferred from one bank account to the
other. For this type of transaction you
need to have authorization for
processing ACH transactions.
Making your processing
fees lower by using Direct Debit
Although, debit card
transactions will attract lesser fees
that the credit card transactions, you
can lower it further. The normal
transaction using the debit card will
have a discount rate ranging between
2and 3 percent. But, the direct debit
transactions have a fixed fee of about
$1 or lesser for each transaction.
You should always look
out for ways to lower the processing
fees so that your business will enjoy
larger profits. Contact
one of our helpful account
representatives to assist you in the
setup of
a
high risk merchant account or
offshore merchant account for a
high risk merchant. |