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Credit Card Rates
Versus Debit Card Rates
Meridian Payment Systems is very
proud to introduce a new cost saving program to our
merchants. Retail, Mail Order/Telephone Order, and
Internet merchants can now benefit from the lower costs
processing companies' pay to process debit check cards.
Through Meridian Payment Systems all merchants will
still have access to the normal low credit card rate
available through Meridian, but will now automatically
have available even a lower rate when accepting a debit
check card. Depending on the size of a merchants'
average ticket, or sale amount, anywhere from as little
20% and up to as much as 70% or more of all merchants
card transactions are actually debit cards versus credit
cards. As such, this new program can provide a
significant savings to most merchants.
Whether the debit card is swiped through a credit
card terminal, hand keyed into the terminal, or taken
via a virtual terminal over a website. This
revolutionary pricing structure is included in one low
statement fee, and provides decreased processing
expenses to all merchants regardless of how they accept
credit card transactions. Although the traditional flat
debit card rate is still available to retail merchants
with a debit pin pad, now merchants with very large
average tickets or those that never have their customer
present in order to enter their PIN number into a debit
pin pad will benefit from the lower cost associated with
processing Visa and MasterCard debit check cards.
In the past, merchants had two basic choices when
accepting a debit check card. First, they could accept a
debit card by "swiping" it through their credit card
terminal just like a credit card, and pay the exact same
discount rate (percentage of sale) and transaction fee
they would pay for accepting an actual credit card. Or
second, a merchant would purchase a terminal that
included a hand held pin pad so when receiving a debit
card as payment their customer would enter a four digit
personal identification number (PIN) into the pin pad;
The same four digit personal identification number the
customer would use when withdrawing money from an ATM
machine at their bank.
This resulted in the merchant paying a flat rate to
their processor for the debit card sale, regardless of
the dollar amount of the sale. Whether the sale was for
ten dollars or one- hundred dollars the fee would be the
same. Versus paying a discount rate and transaction fee
like when accepting a normal credit card. This can still
be a very cost effective option for retail storefront
merchants (customer's must be present to enter their
PIN), who have the correct average ticket size.
If the merchants' average ticket were too high, the
less likely it would be that customer's would be willing
to cover the cost of the purchase out of their checking
account using a debit card. Instead, higher average
ticket purchases would normally be made on credit, using
a credit card. If the merchants' average ticket were too
low, by some quick basic math it was realized it would
actually be cheaper for the merchant to just swipe the
debit card through the terminal like a credit card, and
forgo the pin pad all together. Often a merchant would
not notice, or be too busy to recognize, they were being
handed a debit card at all and would just swipe it like
a credit card, even though they had a pin pad for their
customer's PIN. The merchant would then fail to receive
the potential savings provided by the debit flat rate,
after having paid the additional expense for the pin pad
when they bought their equipment. |