The Debit Card Payment Process

While many merchants and industry insiders in the payment-processing industry frequently use the terms credit card payment and/or debit card payment interchangeably, there are unquestionably some factors to consider when differentiating the two from each other. Today, we’ll be discussing the debit card payment process in particular, and how it differs from credit card processing.

The debit card payment process entails the same basic processing steps as in credit card processing, but with a few major exceptions. As you may very well know – if you’ve ever run a business of your own, or if you’ve ever been involved in the payment-processing aspects of such a business – a debit card deducts the funds from a customer’s or a client’s checking – or some would call debit – account directly, whereas with credit card processing, it’s technically the card-issuing bank that is first billed (and from whom funds are deducted from the patron’s line of credit) and then the customer pays his or her credit card bill at the end of the month – or at the very least, its minimum payment.

Let’s discuss the debit card payment process from three separate perspectives: the customer (also called the cardholder in the debit card payment process), the merchant (the one selling the goods or services to the customer or client), and finally, the payment processor.

Cardholder: In the debit card payment process, a customer who pays with his or her debit card is actually paying far more like they would with a personal check or paying cold cash than with a credit card. This means that the funds can be directly deducted from his or her checking or savings account, and that they won’t have to pay for it later. Unlike the debit card payment process, paying via credit card requires that the customer borrow a small amount for a time, and then repay the small loan (from the card bank) when he or she receives the bill for the month.

Merchant: To the merchant, the debit card payment process can vary with regard to costs associated with processing, depending on the plan. Further, the debit card payment process additionally may require special configuration or equipment, again according to many different aspects of the payment-processing arrangement.

Processor: Lastly, when the payment processor – like Vision Payment Solutions, for instance – implements the debit card payment process, it’s much different for the processor than it is for the other two parties involved in the transaction (the customer and the merchant). This is because there are so many different debit card payment process specifics that require different authorization, batching, and settlement processes – even mandating entirely different processing networks, in some cases. Moreover, there are special laws governing the use of the debit card payment process.