Debit cards are also referred to as the electronic checks. They are categorized into signature cards and PIN cards. In a PIN card the cash is mechanically taken away from the account. The Signature Cards are also known as check cards. The cash is deducted from the Signature Cards within a span of three days. A PIN number is not required in this as a person only has to sign the acknowledgment.

Today the debit card payment processing can be done with a sole card. In e-commerce businesses, debit cards in handling out the payments is one of the most sorted out options by business holders. The cards today can be used both as a PIN card and also as a signature card.  Both these cards can work in the ATM machines. By using the PIN card, a person can get the money directly from the account. But with the use of signature cards, a person has to keep a record of his receipts as the cash cannot come in few days.

The debit card payment processing can also be considered as one of the safe mode of transactions and it protects from any online theft too. However, if in case the debit card is lost then in two days a theft report has to be launched for recovering the lost money.

Merchants have two options of processing debit cards. The first option is offline (signature based) and the second option is online (pin based). For online debit card processing the card should be branded either with VISA or MasterCard logo. The online processing of debit cards in done in the same way as a credit card. After the card details are entered the merchant service provider connects to the payment gateway of the bank for the processing. In an offline transaction the customer is asked for the pin number on the card. The customer enters the pin details on the Pin-Pad. The machine helps in connecting to the payment network and automatically authorizes the payment and produces a transaction. The entire transaction takes 3-4 second to complete but as an end-user we are not aware of the complex processes that go at the backend.

Customers should take note that entering the pin amounts to authorizing a transaction. The bank where customers have their accounts will recognize the pin number of the customer and debit the account as per the sale information. Merchants get their money within a period of 24 hours-48 hours and the process is faster than credit cards. The time frame may vary from country to country and the clearing mechanism in each country. In the United States the ACH process transfers the money directly into the account bypassing the payment networks used in processing credit card payments. As a merchant and an end-user we should have some knowledge of how the processing of debit card is done. This will help us to ensure a smooth and safe transaction.