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Learn about Payment Processing

How Debit Card Processing Works

If you are not familiar with how debit card processing works, this page will give you a basic understanding of the process.

Making the sale

At the point-of-sale your customer decides to use their debit card - also known as a checkcard or ATM card - for payment.

There are two ways to process debit cards: offline (signature-based) or online (pin-based).

For a debit card to be processed offline, they must be branded with the VISA or MasterCard logo.  This is the most common way to process debit cards.  They are processed the same way as Credit Cards.

To process debit cards online using the PIN-based method requires different processing, which is what we will cover on the rest of this page.

Commonly you will ask your your customer if this is a credit or debit sale.  You will will then swipe or key their payment card, which produces a transaction for the payment.  You also have the option of giving "Cash Back" during this sale.  Your customer is then required to enter their Personal Identification Number (PIN) in a secure, encrypted Pin-Pad.  This automatically authorizes the payment and produces a transaction.

A receipt is then given to your customer.  There is no need for a signature since your customer entered their PIN.

The Transaction Process

This takes place once your equipment connects to the payment network.  It is where all the complex work is done.  This usally only takes 3-4 seconds.

The sales information travels from your processing equipment across the secure payment network to your customer's financial institution where their bank account resides.  Since your customer entered their PIN at the point-of-sale, the transaction is already authorized.  The account is then checked to determine if there is enough money to cover the sales amount.  If so, the transaction is approved.

The checking account is then immediately debited and an ACH transaction is scheduled to transfer the funds to your bank account.

Get your money

Getting your money is usually faster than the credit card process.  The ACH process transfers the money directly into your bank account, bypassing all the payment networks used when settling credit card payments. It usually takes 24-48 hours to get your money.

Learn more about the benefits accepting debit cards.