One thing you might notice when looking at the average credit card processing fees for each network entails how debit card processing costs are notably lower in value. Debit cards don’t carry as much risk as credit card transactions, allowing them to be more affordable. These cards have various benefits, but that doesn’t mean you should expect people to use them as often as they would use credit cards.
What Are the General Costs?
The average credit card processing fees for most cards can be worth 1.5 to 2.5% in most situations. The total varies surrounding your industry and the card network.
A debit card will have significantly lower charges than those credit card processing costs. A debit card can come with a fee from 0.8 to 1.15%. The value may be lower if the customer has to enter a PIN or other form of confirmation.
The total cost for a transaction should be substantially lower for a debit transaction. It can cost less than 50 cents to process such a deal.
Why Is It Cheaper?
Credit cards are riskier than debit cards because a credit deal will take a while to settle. There’s a potential that a credit transaction might be fraudulent. The customer might demand a chargeback if there’s a problem with the transaction.
There’s no guarantee that the customer will pay one’s card bill on time either. The card company will demand an extra charge on the merchant’s end to cover the expense and risk.
With a debit card, the money one owes is immediately sent from one’s bank or checking account. The confirmation process takes a few moments. The money moves fast and is confirmed to exist. Since the money can safely move forward, the retailer won’t be asked to carry more of the risk for the transaction.
Security Is Critical
One feature of debit card payments comes from how many customers have to follow a secondary measure of confirming one’s identity when using such a card. A customer might have to either enter a PIN that links to a card or a signature confirming one’s identity. These features will link to whatever data a bank has surrounding that card.
Will You Experience More Debit Payments?
The good news for retailers is that debit cards are easier to use today than ever. Many debit cards work on the same networks that traditional cards utilize. You might find some debit cards that come with a Visa or MasterCard brand, for example. These cards can work in places other than a traditional ATM.
Some customers may also prefer the convenience of a debit card. Instead of paying for something later, the customer is paying for the item right now with one’s bank account.
Do not assume that most people will still use these cards over traditional credit cards. Continue factoring in credit cards when looking at your processing costs. Debit cards will keep your costs down, but they won’t be used by your customers as often.
