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All about Debit Card Transactions
Processing debit transactions is fairly straightforward. There are three important points to
remember:
1. Debit transactions can only be performed in a Retail or "face to face" environment. If
you are a Mail Order type business, you cannot perform online debit transactions.
2. There are two types of debit cards:
Online -- Online debit refers to debit card processing that requires you to enter a PIN
when processing a transaction.
Offline -- Offline debit refers to a check card that has a VISA or MasterCard logo on
the card. Offline Debit cards can be processed as credit cards.
3. Online debit transactions require you to have a card reader and PIN pad attached to
your computer.
As with credit card processing, debit processing is a two-step process. Debit processing
requires re-transmission of information, referred to as Closing. Typically, debit card
processing companies are host based. That means the information to be re-transmitted is
stored on the host computer systems or the processor's computer system. You can be set
up one of two different ways.
You can be set up for Auto (Time Initiated) Close. At a certain time during the day the
host based system will scan their computer system. If you have transactions waiting for
retransmission, they will automatically process the information.
You can be set up for Manual Close. This setup is similar to being terminal based. You,
the merchant, are responsible for re-transmission. If you are set up for manual close, you
will need to perform a close to complete your debit transactions.
If you are processing credit card transactions as well as debit transactions, the debit
transactions will be closed at the time you settle your credit card transactions.
There are two main types of debit card transactions: Sales and Credits. Other debit card
transactions (Void Sale, Void Credit, etc.) are variations on these. The different types of
transactions are also known as actions. Here is a list with general descriptions:
1. Sale -- This action decreases the cardholder's limit to buy. It authorizes a transfer of
funds from the cardholder's account to your account.
2. Credit (Return) -- This action increases the cardholder's limit to buy. It authorizes a
transfer of funds from your account to the cardholder's account.
3. Void Sale -- This action removes a sale transaction. No funds will be received from
this transaction. Use the Void Sale action to correct mistakes and on same-day
returns. This action can only be performed before batch settlement/close. With a host
based auto-close system, the action has to be performed on the same day.
4. Void Credit (Return) -- This action removes a Credit
transaction. This action can only
be performed before batch settlement/close. With a host based auto-close system, the
action has to be performed on the same day. If you want to void a credit and the
action is not available, use the Void action.
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