Debit Card Signature vs. PIN Transactions
At Card Payments International, we provide UT payment processing services and we want our business clients to understanding debit card transaction fees and the difference between signatures and PIN debit transactions to help your business save money. PIN transactions incur several different fees, making signature transactions cheaper to process. Here is a look at both transactions:
A signature debit transaction occurs when a customer uses his or her debit card without entering a PIN, but instead signs a sales receipt as though he or she used a credit card to make the purchase. Signature transactions are directly routed to the bank via Visa or MasterCard for a single fee calculated by the size of the bank issuing the card, the amount of the transaction, and whether the card is card-present or not. PIN transactions must go to the go through the PIN debit network, incurring fees there.
A PIN debit transaction is one in which a consumer pays for a product or service by entering a personal identification number (PIN) into a PIN pad to complete the transaction. Information about the transaction is routed from the merchant to the customer’s bank by a PIN debit network after the transaction is subjected to the debit network’s fees. But in addition to a flat fee, the debit network fees also include a percentage of the purchase, the amount of which is determined by a merchant category code, transaction size, and a few other variables.