When you’re talking a processor, normally merchants only focus on the cost of their credit card rates.

Ideally, they should ask about the cost of debit card rates, since they will not be the same cost as running a credit card.


Depending on your processor, they’ll either be fair, or an unexpected slap to the face.

Sometimes, salesmen for processors will talk up how low and flat their credit card rates are, leading their potential customer assuming that includes debit cards.

The merchant is shocked then, when their statement looks much higher than they expected.

Don’t make a mistake, and assume that debit and credit are processed the same.

Your processor, if they’re honest, should make the differences in rate pricing clear from the beginning. It could be a costly mistake using their business without knowing what you should expect on your statement.

Why are they different rates?

They represent different types of transactions.

Debit cards act as a real life exchange of money, where credit card funds will take a day or two to process.

What that means is debit, is taken immediately out of a cardholder’s bank account, which alerts the merchant to know if the cardholder’s checking account has sufficient funds. Debit cards essentially “debit” the cardholder.

Credit cards, are a different breed altogether

Credit cards are giving the cardholder a limit of credit by debiting the cardholder’s bank (rather than the cardholder directly). The bank credits you (the merchant), and then later passes the debit to the cardholder on their credit card statement.

The best way to think of it, whenever there’s a transaction, one is being debited, and another is being credited.

Debit cards directly debit the cardholder, where credit cards debit the bank, which then passes the debit onto the cardholder.

Does your brain hurt yet?

Why do processors mislead merchants into thinking debit and credit cards are the same?

Processors can be greedy, and misleading you into a bad deal.

If they’re offering a flat 1% rate for credit cards, chances are, their debit card fees are horrible.

Visa and Mastercard both have different interchange rates for credit and debit.

Taking it all in

It may seem confusing, but understanding how debit card rates are processed is vital when doing business with a processor.

If you’re interviewing a processor, make sure to ask about their debit rates. Lest you be in for a wicked surprise on your processing statement.

Want to talk to a provider that gives fair debit rates?

Take a look at our services, and see what others have said.

If you’d like to learn more about what our company can do for your business, or would like a free consultation, contact us here.