A debit card is a bank issued card that allows its user to access the funds in his account to pay for merchandise or services. A debit card acts like a credit card, and is often associated with a credit card brand such as VISA or MasterCard, with the difference being that funds are immediately deducted from the cardholders checking or savings accounts when a purchase is made.
Debit Card Services is an easy way to deduct a payment directly from a customer’s bank account. It uses the premise of a paper check but takes it to the next level with electronic funds transfer. With Debit Card Services, the need to write paper checks is completely eliminated. The customer simply gives you permission to take funds directly out of his checking or savings account and transfer them to yours.
Debit Card Services is typically used for auto-recurring billing of regular transactions, such as a monthly rent payment, so that written permission to transfer funds is needed only once and customers no longer need to write checks every month. But, it can also be used with an Online Payment Gateway to enable your customers to purchase your products or pay their bills directly from a checking or savings account instead of with a credit card or debit card.
Debit card transactions and Debit Card Services are at their core the same—each authorizes a transfer of money directly from the cardholder’s account to the merchant’s account. And, from the consumer’s standpoint they are exactly the same.
From the merchant’s standpoint however, they are very different. The transactions are processed through different networks, and the payment processing charges differ significantly.
Debit card transactions are processed through the same network as credit card transactions, and funds are deposited, less a commission into a merchant account. The discount rate for debit-card purchases is typically lower than for credit card purchases, however there are some merchant processors that do not extend this discount to their clients. Typically, 2-3% of the transaction plus a 30 cent inquiry fee will be deducted from a debit-card payment and the balance will be deposited into the merchant’s account.
Debit Card Services use the Automated Clearing House (ACH) network to move funds from one bank account to another. Thus, you can use your regular business checking account for Debit Card Services.
Accepting Debit Card Services instead of debit-card transactions can generate significant savings for most transactions; with the rule of thumb being the larger the transaction amount the more the merchant saves.
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Article Source: Save more with Direct Debit Processing.
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