A few years back, it used to be a chance of luck if the business had a terminal to accept a debit card. This, however, changed as online payment gained a more major market share. More customers began carrying debit cards for shopping, and automatically, more shops began updating themselves with the required terminals to accept debit card payments.
A report states that there are about 850 million debit cards in India as of August 2020 which is a staggeringly high number. Almost every business, online or not, supports debit cards today. The question, nevertheless, is, how do debit cards enable a transaction? This blog provides insights into what happens at the back end that makes a card with some chips handle large transactions across bank accounts.
Debit Card Processing
By the looks of it, a debit card is not very different from a credit card. It is of the same size, usually of the same plastic with a not very different design. Generally, it bears similar design elements and processing chips too. What differentiates the two cards is how they transfer the money.
While a credit card enables purchases based on credit, a debit card sanctions a direct debit of the concerned amount from the customer’s bank account & the merchant has to bear the payment gateway charges for processing the debit card payments. Further categorizing, there are three types of debit card processing:
- PIN Debit
The most common debit card transaction is authenticated using a PIN or a Personal Identification Number. The number is allocated to the card beforehand, and for every purchase, it has to be entered. This acts as a safeguard mechanism as the PIN would be known only to the original owner. Even if the card was to get lost and somebody else got hold of it, that person won’t know its secret PIN.
- Signature Debit Card
It involves signing a receipt on the processing terminal. The payment is processed through a credit card network and is usually called an offline debit card transaction because it isn’t attached to the bank account.
- Contactless Debit Transactions
The debit card must be held near a POS (Point of Sale) terminal equipped with NFC (Near-field communication) to transfer the information withheld in the card. It still requires a PIN to verify the transaction. The only difference that it brings to the table is that the payment is quicker and more convenient due to the contactless process.
How is the payment processed?
The debit card payment is processed using a POS (Point-of-Sales) terminal in case of brick-and-mortar business. A payment gateway or a link is used to process debit card payments in the online payment world. The exact steps in which the payment is processed online are somewhat as below:
- The customer is directed to a payment gateway page. This page can accept multiple payment methods, and the customer has to choose the debit card option.
- The system would then ask for the card information: the card number, card holder’s name, expiry date, CVV, and some other relevant information.
- The system then verifies the information submitted, and after authentication, it sends an OTP to the customer’s registered mobile number or email.
- If the OTP is entered correctly and required funds are available, the system gets a green flag to process the payment by deducting it from the associated bank account and crediting it to the required system.
- The debit card network now comes into play to credit the online payment amount in the merchant account.
Even though the steps mentioned here seem pretty complicated, all these take place within a fraction of a second. Debit card payments, as a result, are quite efficient and suitable for quick transactions.
How to get started with debit card processing?
The most important question for businesses is how they can start accepting debit card payments. The answer is quite simple for brick-and-mortar shops as they just need to get a POS terminal. For online businesses, the process flow is very different.
There are two ways online businesses can accept debit card payments using services like Zaakpay- payment gateways and payment links. Businesses have first to decide which service they want and the provider that suits them the most. Payment gateway charges are significant as it needs to be affordable to the business.
The steps to set up a gateway are:
- Sign up with the provider and pay any fees or dues.
- Get the merchant account activated. With a robust gateway like Zaakpay, this takes around 24 hours.
- Integrate the gateway into the website.
- Promote the gateway and start accepting debit card payments.
The process to set up a Zaakpay payment link is much easier:
- Register with the payment link service and pay any charges
- Get access to the linked dashboard
- Generate payment links for all the open transactions
- Share the payment link with the intended customer
- Track the status of the payment using the dashboard
The process to register with Zaakpay is seamless and simple. Irrespective of the scale of the business, merchants can choose it as their payment partner.
Conclusion
Debit cards have become an everyday use tool. Many customers prefer them over credit cards because of their instant nature. While a credit card requires the customer to clear the dues later, a debit card instantly debits the money, giving the customer a more realistic sense of the funds available in the account. Keeping that in mind, merchants should offer debit card payment options to their customers. Hence, for exponential business growth choose Zaakpay which offers their services at affordable payment gateway charges,
