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Difference Between Credit and Debit
We’ve all seen the wallet with tons of plastic in it. Someone who has so many credit cards of all shapes and colors that it makes their wallet heavy. Even if your wallet isn’t as scary, chances are you have at least one piece of plastic: your debit card. So what is the different between your debit card with the Visa or MasterCard logo on it the other cards with the same logos, American Express, or Discover logo on it? Some differences are obvious, but not many people know the differences that effect your merchant account.
The main difference between credit cards and debit cards is money. When a consumer uses a credit card they are using borrowed money. Every month they get a statement detailing where they spent the borrowed money and how much of it they have to pay back. With a debit card, however, the consumer is only using money they already have. If the consumer tries to swipe the debit card with insufficient funds, the card will be denied ending the transaction. There is no borrowing involved.
For a merchant, there are more differences that go unnoticed by the everyday consumer. When you accept a credit card you swipe the customer’s card and present a receipt for them to sign. The receipts are then batched out, usually at the end of the day, and the money is taken from the customer’s account then. On the other hand, if the customer uses his/her debit card and enter their pin number into a pin pad, money is taken out of their account and credited to you immediately.
For most businesses, having a credit card machine that accepts both types of cards and has a compatible pin pad is the best option. There are benefits to both types of payments that will help your company succeed and make your customer’s happy. The more choices they have when paying you, the more repeat business you will receive. Customers will notice your flexibility and you will be rewarded.
The main difference between credit cards and debit cards is money. When a consumer uses a credit card they are using borrowed money. Every month they get a statement detailing where they spent the borrowed money and how much of it they have to pay back. With a debit card, however, the consumer is only using money they already have. If the consumer tries to swipe the debit card with insufficient funds, the card will be denied ending the transaction. There is no borrowing involved.
For a merchant, there are more differences that go unnoticed by the everyday consumer. When you accept a credit card you swipe the customer’s card and present a receipt for them to sign. The receipts are then batched out, usually at the end of the day, and the money is taken from the customer’s account then. On the other hand, if the customer uses his/her debit card and enter their pin number into a pin pad, money is taken out of their account and credited to you immediately.
For most businesses, having a credit card machine that accepts both types of cards and has a compatible pin pad is the best option. There are benefits to both types of payments that will help your company succeed and make your customer’s happy. The more choices they have when paying you, the more repeat business you will receive. Customers will notice your flexibility and you will be rewarded.
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