Content of the material
Whats Cheaper: PIN or Signature Debit Transactions?
Factor 1: Transaction Size
For a quick-and-dirty answer, take a look at your typical transaction value. If the ticket size of your sales is usually less than $50, it’s more cost-effective to run your sales as signature debit transactions. If customers generally spend more than $50 on debit purchases, you’ll save more money running your sales as PIN debit transactions. This is because PIN debit transactions have a flat per-transaction fee, while signature transaction fees are calculated as a percentage of the ticket value. Any time when the transaction value is low enough that the percentage fee is lower than the flat-rate PIN transaction fee, you’ll save money by going with signature debit transactions. Conversely, the flat rate of PIN debit transactions will be much cheaper on larger-ticket transactions.
Looking at your typical transaction size provides a good starting point, but unfortunately, there are many other factors involved in determining transaction costs, and a comprehensive understanding of your cost savings potential requires a closer look.
Regulatory pressures play a surprisingly large role in influencing the cost-effectiveness of payment-processing options. For example, in the US, the Durbin amendment set a limit on the fees charged to merchants for debit card payment processing, but it applied only to cards issued by major financial institutions – those with more than $10 million in assets. This legislation effectively created a division between “regulated” and “unregulated” cards, depending on the size of the issuing bank. However, there’s no way to tell just by looking at a debit card whether it’s issued by a regulated bank or not, so you won’t find out if it’s subject to the fee cap until the transaction has been processed.
What information is on a credit card receipt?
Since consumer privacy is part of the Fair and Accurate Credit Transactions Act, certain information must be present on a credit card receipt.
- Your primary account number: Your PAN is a condensed version of your full card number. Your PAN is typically the last four digits of your full card number.
- Transaction information: This includes the date, time and total transaction amount. Some vendors will itemize each item purchased and its price.
- Vendor information: The vendor's name, address and merchant ID tells the payment processing system where to send the payment.
- Authorization code: This is the approval code for the transaction, authorized by the card company. It states the buyer has enough funds available for the purchase.
Why do you have to sign the back of a credit or debit card?
Credit card issuers usually require you to sign the back of your card in order to verify your identity. Merchants are supposed to compare your signature on the receipt to the signature on your card to confirm you are the valid card owner.
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Back of a Debit/Credit Card
There’s more to making payments than reading off a card number. The back of a debit or credit card includes additional important features.
1. Magnetic stripe: This black strip contains information about you and your card, and specialized devices known as card readers gather that information. Every time you swipe your card at a merchant, you run the magnetic stripe through a card reader to provide your payment details. Magnetic stripes include your name, card number, expiration date, and other details. If that information is stolen (whether hackers steal the data or a dishonest merchant runs your card through a card skimming device), the thief can use it to create a fake card with a magnetic stripe that matches your card.
Magnetic stripes occasionally wear down, especially if you’re a heavy card user. Strong magnets can also damage them. If your stripe stops working, merchants may need to punch in your card number by hand, which they may be reluctant to do for security reasons, but you can order replacement cards with a new stripe.
2. Hologram: Some cards display a hologram, or a mirror-like area showing a three-dimensional image that seems to move as you change your viewing angle. Holograms are security features that help merchants identify valid cards. Holograms are difficult to fake, and technology is constantly improving. Sometimes holograms appear on the front of your card.
3. Bank contact information: If you need to get in touch with your bank, use the contact information on the back of your card. This is convenient and an excellent way to prevent fraud. When you use the contact information on your card, you know you’re really talking with somebody from your card issuer. This is especially important if you receive a call or email that might be from your bank, but might also be from a con artist. Instead of returning the call or email using the contact information they provide, call the number on the back of your card so there’s no doubt you’re calling a legitimate number.
It’s a good idea to keep your card issuer’s contact information stored separately from your card. If you lose your card, contact your bank as soon as possible. Write the number down in a safe place, or store it in your phone’s contact list.
4. Signature panel: Your card must be signed before you can use it, so sign your name in this area. It’s not easy to fit a signature in that small box, but do your best. Signatures are a requirement for card issuers, and merchants should also verify that you’ve signed the card as part of the credit card authentication process.
5. Security codes: Cards are printed with an additional code to help ensure that anybody using the card number has a legitimate, original card. For payments online or by phone, merchants typically require more than just the card number and expiration date from the front of your card. The security code on the back creates an additional hurdle for hackers who may have stolen your card number from merchant systems or with the help of a skimmer.
Security codes might be referred to as CVV, CVV2, CVC, CSC, CID, or other similar names. Most websites just ask for a “security code” and provide a small box for you to type the code into. On Visa, MasterCard, and Discover cards, the code is a three-digit code on the back of your card. The preceding four digits (“3456” in the image above) are the last four digits of your card number. On American Express cards, the security code is a four-digit code on the front of the card. Look above your card number on the right side of the card.
Your security code, like all the other numbers on your card, is a critical piece of information. Don’t share that code unless it’s necessary for making a payment to somebody you trust.
6. Network logos: Your card might have additional network logos on the back, often in the lower-right corner. These logos help you figure out which ATMs you can use for free. You can, of course, use other ATMs, but you’ll most likely pay fees to the ATM operator. Plus, you might pay additional fees to your bank or credit card issuer if you use out-of-network ATMs. If you belong to a credit union, remember that you may be able to use thousands of other credit union branches nationwide.
How to keep credit card information safe
Although the big four credit card companies no longer require a cardholder to sign the back of a card, since EMV-compliant systems are generally regarded as secure, you and your customers may wish to take extra precautions to ensure account safety. Here are some everyday tips for cardholders:
- Don't let others use your credit card. If you want someone to make a purchase on your behalf, add them as an authorized user to your credit card account. This also ensures no holdups at the business, where personnel can easily verify the identity of the person using the card if necessary.
- Don't leave your card unattended. A lost or stolen card can be used anywhere, creating a headache for merchants and customers alike.
- Monitor your online accounts. Alert the merchant and your credit card company or bank to any fraudulent charges.
Key takeaway: It's still good practice to sign the back of your debit or credit card, even if it's no longer required, as one of several personal safety measures you can take to keep your card secure.
Trish Petak and Stella Morrison contributed to the writing and research in this article.