Merchant Services: Consumer Credit Card Protection, Part 2

Debit cards are another way for customer to pay that offer the same convenience as a credit card, but the funds are deducted directly from their bank account instead of credit. Theft and fraud for debit cards is also high, but tends to be a bit lower risk for theft. There is often a surcharge associated with using a debit card and this charge is billed to the customer. The rate of these fees varies from bank to bank, and may also depend on the amount of money being charged on the debit card. The funds using debit are usually placed on a temporary hold until they actually clear the customer’s bank. Because the bank is technically the issuer of the money, merchants are at a lower risk and are therefore charged a lower pass through fee. New laws passed have now asked banks to simply decline a customer’s debit card if they have insufficient funds versus charging them overdraft fees. This can affect you because the customer my have to decline making a purchase due to lack of funds, but it is a help to them because it avoids them having to pay overdraft charges later.

There are many laws and stipulations put in place when it come to using both credit and debit cards. Merchants can be aware of current laws and understand what to look for in the event that someone is attempting to use a stolen card. By understanding these laws and knowing the ins and outs of how credit and debit cards work, you can better protect yourself and your customers from fraudulent or unauthorized charges.

For more information about debit and credit card transaction laws, please refer to the following websites:

Consumer Credit Card Protection, Part 1

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