We are living in an age where plastic is king and many consumers are resorting more and more to debit and credit cards when purchasing items. Because PIN based debit cards are so popular, business owners should become familiar with the savings that are available through accepting them. They are quickly replacing checks and are actually safer to use than credit cards.
Using a debit card requires using a PIN number which the bank assigns to the account holder. The account holder chooses a four digit number which identifies the debit card as his own. No one else has access to the card once the owner chooses the PIN number. In order for card holders to enjoy the safety of their transaction, they must use the PIN number each time they make a purchase.
Equipment for Proper Processing
In order to process debit cards, the business owner must purchase a PIN pad for the credit card terminal. This PIN pad, which is the size of a hand calculator, is attached to the back of the credit card terminal. Upon presenting the debit card, the business owner must ask the customer to enter their PIN number into the PIN pad. The customer can request cash back as part of the transaction.
Reluctance Leads to Losses
Many business owners purchase the PIN pad and opt not to use it because of the perceived sensitive nature of asking for PIN numbers. However, the merchant can lower credit card processing rates by as much as 60% and this is creating a safer transaction for the customer, since the PIN number is used. There is less of a chance of identity theft, since the customer is the only one with the PIN number.
In reality, the customer is used to being asked for the PIN numbers at major department stores and grocery stores. The business owner should not shy away from asking customers to enter the PIN numbers, as the customers were told when they applied for the card that they would be asked to enter the number into ATM machines and at retailers throughout the city or town. Customers are prepared to use the number when asked.
Accuracy in Accounting
One of the ways that merchants can utilize debit cards is by controlling and recording the tips employees receive when providing a service. The merchant can assign a server identification number to each employee. Each time an employee enters a transaction, he/she must enter the server identification number. The customer can request the tip as cashback and present it to the employee. The credit card terminal keeps a record of the cash back.
Satisfaction Leads to More Patrons
A customer is more likely to return to your storefront knowing that the/she can request cashback as part of the service. This eliminates the possibility of losing the customer to another business to use the ATM machine and saves the customer a trip to the bank. Each time the customer uses the ATM machine at a neighboring store, the business owner collects a fee for using the machine, which he keeps as profit.
If you accept debit cards and process the card as a debit card, you can provide cash back to the customer upon request. However, if you do not process the card as a debit card, you cannot provide cash back to the customer, because the transaction has to be recorded as a debit card transaction. If you are erroneously processing debit cards as VISA or Master Cards, you are incurring higher fees for processing the debit card.
In conclusion, when business owners process debit cards, they save on fees, meet customer needs by providing cash back, earn more profits, and acquire more customers.
 |
