What Smart Business Owners Understand About Debit Cards

When a consumer runs their debit card are they being asked to sign their name or enter a PIN?  The network through which the debit card transaction is processed could have an impact on your margins, depending on the size of your transactions and the pricing structure of your payment processing company.

Signature debit transactions are cheaper if your business has average tickets under $15. Conversely, a PIN debit card transaction has a lower processing cost if your business average ticket is higher than $15.

Fee Structures and Mark-ups

The difference is the fee structure.  Signature debit card transactions have higher percentage-based fees and lower transaction-based fees. PIN debit transactions have lower percentage-based fees and higher transaction-based fees.

Your processor’s mark-up also affects the difference in cost.  For signature debit card transactions, your processor adds both a percentage and transaction-based fees.

To determine the actual costs you pay for each debit transaction, you will need to know your payment processor’s pricing plan – tiered or interchange plus.

Interchange Plus Pricing

For example, let’s look at an interchange plus signature debit card transaction. In this example, we’ll assume the processor charges .015% plus $0.10. To calculate the total fee, add the processor fees to the VISA debit interchange fee. As of April 2019, VISA fees were 0.80% plus a $0.15 transaction fee.  The total processing fee would be 0.95% plus a $0.25 transaction fee.

For a $15 sale, total fees equal $0.385.   For a $100 sale, total fees are: $1.20

In a PIN debit sale with interchange-plus pricing, let’s assume our processor adds a transaction-based mark-up of $0.12. If the debit network’s fees are 0.80% plus a $0.185 transaction fee, the total fees for this PIN debit transaction are 0.80% plus a $0.305 transaction fee.

For a $15 sale, total fees would be $0.425.  For a $100 sale, total fees would be $1.11

Tiered Pricing

Let’s assume average PIN debit network fees of 0.834% plus $0.197 per transaction, and the processor ‘s PIN debit fee is $0.18.   Total fees would be 0.834% plus a $0.377 per transaction fee.

For a $15 sale, total fees equal: $0.502   For a $100 sale, total fees are: $1.21


Understanding which type of debit card is cheaper to process for your business depends on the size of your business and your processor’s mark-up.  Generally, signature debit cards are more affordable to process if your average sale is under $15, and you have interchange-plus pricing with your processor. PIN debit is better for larger tickets and when you have interchange-plus pricing from your payment processor.

IntelliPay’s experienced sales consultants can answer your questions and help optimize a solution than lowers your overall processing cost.   To contact sales, call 855-872-6632 or sales@intellipay.com.