Debit-Only Card Payments Explained

Debit-Only Card Payment, Debit Payments, High-Risk Merchant


      When it comes to processing payments, businesses have many options to choose from. The two most common options are credit and debit cards. Why would a company want to accept debit-only card payments solely?  As every business has goals and needs, debit-only payment processing can be beneficial for specific industries. In particular, industries where credit card processing is prohibited, a debit-only payment solution is beyond helpful.

      Debit-Only Payment Benefits

      1. Reduced Cost – A debit card payment carries less risk than a credit card payment. This is due to funds withdrawn from a checking or savings account associated with the card immediately. Debit card payments also equate to lower than average chargeback percentages. For these reasons, it’s normal for debit-only card payments to be assessed a lower processing fee than merchant accounts with both debit and credit card acceptance.
      2. “PINless” Processing – Entering a PIN (Personal Identification Number) is usually associated with debit-only payments. eCommerce merchants can still accept a debit payment without a PIN by processing over an EFT Network (Star, Pulse, NYCE, etc.). Don’t let the terminology scare you; your customers will complete the transaction just as they would with a credit card on the front end.
      3.  Immediate Approval – Since debit-only card links to a checking or savings account, it is incredibly similar to an ACH, or electronic check, payment. The main difference is a debit card payment has funds immediately withdrawn, whereas an ACH payment needs to be submitted and transferred. This most often results in an additional day or two delay in receiving funds into your bank account. ACH payments also risk coming back NSF (Non-Sufficient Funds) by the time the payment clears your customer’s bank account.

      High-Risk Merchant, Debit-Only Card PaymentsHigh-Risk Industries Benefitting from Debit-Only Payments

      Many business types can benefit from debit-only card acceptance – high-risk companies included. If working in the following industries, it may be worth looking into debit card payment processing to improve your bottom line:

      • Annual Subscriptions
      • Bail Bonds
      • Charities
      • Credit Repair
      • Home-Based Business
      • Firearms
      • Law Offices
      • MOTO (Mail Order/Telephone Order)
      • Online Auctions or Raffles
      • Telemarketing
      • Timeshares
      • Travel Agency

      Don’t see your industry listed above? Don’t stress – experienced high-risk merchant providers, like Payment Savvy, can work with businesses of all shapes and sizes. Reach out to us today to discuss how we can create the perfect debit-only payment solution for your business.

      Eli Smith

      Eli Smith

      Responsible for keeping Payment Savvy running like a well-oiled machine, Eli has extensive experience with everything related to technology and financial services. Maintaining back-end operations efficient and productive isn't his only strong suit, Eli is also a key component of our sales team and is in constant pursuit of perfection. In charge of ground-breaking partnerships, he is always on the lookout for the next innovative product offering for our Savvy clientele. Eli's knowledge of the payment processing cycle and critical compliance standards ensure our customer base always has an educated and expert opinion if needed.