Is it cheaper for a merchant to process credit or debit?
Posted on August 19th, 2009 by admin
In general, which results in fewer fees for them, and what is the benefit either way for me?
My bank (credit union actually) does not charge a fee for card use, whether it gets run as debit or credit, so I am looking only to see which costs the merchant less.
Hands down it’s better for the Merchant to process as many transaction as a Online Debit with pin entry as online debit charges a set fee per transaction. Depening on the cost of the item/items normally anything priced at or above .75 will start to be cost efficient to process as a online debit again the key is one fee as compared to a discount fee on the total order in a credit or off-line debit transaction (ie.signature/check card/no pin). Discount fees on merchant accounts average 2-3% hope this can help…
August 19th, 2009 at 6:51 am
debit for sure, have u ever noticed the sign stores have that state minimum $5 for credit card purchase?!
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August 19th, 2009 at 7:03 am
between 4-10 %
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August 19th, 2009 at 7:30 am
Debit I think
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August 19th, 2009 at 8:04 am
debit,
customer? money right out
owner? cheaper rates
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August 19th, 2009 at 8:17 am
Debit because they don’t have to worry about waiting, the money instantly becomes their’s once it says approved after you enter the pin code.
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August 19th, 2009 at 8:51 am
They usually have to pay a dollar for a credit transaction. thats why some have minumums. Depending on your bank, you may get charged for debit cause the bank has to do the paperwork, but if you use your bank card as credit, then the credit company has to do the work, therefore no charge from your bank! I always use my card as credit, because I get no direct fees that way
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August 19th, 2009 at 8:56 am
In the US it is cheaper to use a credit which is why banks prefer debit. Debit makes more for the bank. In Europe it is backwards with it being cheaper for stores to debit. There aren’t any real benefits for us either way unless you get rewards for using your card a certain way. Merchants tend to prefer credit though.
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August 19th, 2009 at 9:32 am
in my business its cheaper to process it as a credit but by a few pennies only. there are different companys and they all have different rates so we went with this plan cause it seems to be better for us.
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August 19th, 2009 at 10:09 am
I was in a store once when they were training a new cashier, I heard the owner tell him to ask if a card is debit or credit and try to push the use of debitcards because there are no fees involved. They definitely pay fee for accepting credit cards. As for the consumer the benefit is whether you want to pay for it now or later. If you use debit it’s like using cash which is immediately removed from your account. If you use credit it will show up on your next credit card statement and if you don’t pay those in full every month, it could end up costing you more than what you could get it for right now, especially on sale items.Personally I think debit is better all around if you can afford the item right now
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August 19th, 2009 at 10:18 am
Debit…here is something no one knows…Sometimes you will run into a merchant who will not run your card as debit unless you purchase something that has a minimum cost…like they wont let you buy a 5 cent piece of candy. This is because they are loosing money. This is breach of contract, because the majory credit cards have it written in their contracts that the merchant must accept all transations reglardless of price if they agree to use debit to begin with. So next time you try to use a debit card for a low purchase and are denied for that reason, tell them to get out their debit agreement with the card you are using.
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August 19th, 2009 at 10:27 am
Hands down it’s better for the Merchant to process as many transaction as a Online Debit with pin entry as online debit charges a set fee per transaction. Depening on the cost of the item/items normally anything priced at or above .75 will start to be cost efficient to process as a online debit again the key is one fee as compared to a discount fee on the total order in a credit or off-line debit transaction (ie.signature/check card/no pin). Discount fees on merchant accounts average 2-3% hope this can help…
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