PIN/PIN-less Debit Card Payments

To provide full transparency into the Cost of acceptance associated with debit card payment transactions, our platform now offers direct debit network options for Cost configurations and Fee setups, allowing Facilitators and Referrers to pass along payment processing Costs to the Merchants that generate them.

• As a Facilitator, when activating this feature, your entire portfolio can accept debit payments while transferring the cost of acceptance to the associated entity. This allows for better revenue retention.

• As a Referrer, once you start seeing debit interchange costs from your Facilitator, the following capabilities should be automatically enabled for your platform account. If not already done by your Facilitator, please reach out to them to enable this feature.

• For Merchants, adopting this feature will streamline transaction reporting and reconciliation processes by providing comprehensive details on debit-specific interchange fees from both your Referrer and their Facilitator platform.

Available Debit Processing Networks

There are 11 debit card networks available, each with its own associated Costs:

Accepting PIN/PIN-Less Debit Payments

Debit card payment acceptance is the ability to receive debit card payments with a cardholder PIN, or signature. Alternatively, it encompasses the flexibility to accept debit card payments without a PIN for processing and settlement similar to traditional credit card transactions.

PIN Debit

A PIN debit card transaction is an electronic transfer of funds from the customer's bank to the Merchant's bank.

The customer uses a bank-issued debit card linked to a checking account and enters a PIN into a payment terminal at the point of sale. Merchants can enable the PIN entry feature from the Terminal (triPOS) perspective, but it is not auto-enabled for all Merchants. Debit card issuers trigger when a PIN is required, and triPOS EMV terminals respond by requesting a PIN triggered from the card issuer. The parameter can be enabled for Referrers and Merchants from a Division Profile or Group Profile’s “Parameters” menu.

This process also identifies the debit card network with Interchange Costs and clarifies card network assessment Fees similar to credit cards, mirroring credit card Fee structures for groups except for surcharge, as surcharge - a Fee to the cardholder - cannot be assessed on debit transactions.

PIN-Less Debit

PIN-less debit card transactions route payments through a regional network, using a dual message/transaction status system similar to credit cards. Customers can use their bank-issued debit card linked to their checking account and make transactions without entering a PIN or providing a signature. This process works similarly to credit card transactions, where the cardholder swipes or inserts their card into a payment terminal, or uses it for online eCommerce when no physical payment terminal is available.

Debit Transaction Cost of Acceptance

Our platform provides robust options for setting up Facilitator-level Cost configurations and Referrer-level Fee configurations. So what’s the difference?

While both Costs and Fees use the same “Add” modal on screen, they have a few important differences. See the comparison below for details to ensure you understand the difference between a Cost and a Fee on our platform.

Costs enable Facilitators to transfer the acceptance Costs for PIN and PIN-less debit card transactions from the network that initially charged the Facilitator's platform. This allows Facilitators to keep a larger portion of their platform revenue. Conversely, Fees offer Referrers a means not only to reimburse their Facilitator Cost for the debit transaction through the Merchants processing them but also provide greater transparency to these Merchants with clearer reporting on the specific transaction Fees charged. This aids in daily or statement-based reconciliation, resulting in more accurate reporting for all involved Merchants.

How Debit Interchange Expenses Are Passed On

Each debit network has a variety of specific rates of expenses for processing, handling, and approving debit card transactions. These expenses are applied to the payment facilitation platform (i.e. The Facilitator) that enables Merchants to accept, process, and settle these transactions with their associated payment amounts.

Costs

Consequently, the Facilitator can transfer these interchange expenses to the Referrers whose Merchants initiated the debit transaction interchange expenses. This is accomplished through an "Interchange Cost," a Facilitator-configured Referrer, or Division-specific interchange expense. Interchange Costs are established from the Costs section of the Fees Settings page.

When a Merchant conducts a debit card payment, any associated interchange expenses are initially borne by the Facilitator upon transaction approval. However, these expenses are subsequently reimbursed via the Interchange Cost set up for the Referrer.

Fees

From the perspective of a Referrer operating in a similar capacity as a Facilitator, when they incur an Interchange Cost through their setup related to a particular Merchant's triggered expense via a debit transaction, they also have mechanisms in place to pass this Cost on to said Merchant. This is achieved through an "Interchange Fee," which involves setting up at either the Merchant or Group level as an event-triggered expense configuration accessible from the Fees menu on the Groups page.

Essentially, when Merchants accept payments via debit cards, interchange expenses are initially shouldered by the Facilitator upon transaction approval and then reimbursed through an Interchange Cost mechanism that automatically charges certain amounts when incurred by refunding it back directly. Finally, this reimbursement process entails charging 100% of such Costs incurred by facilitating entities like Referrers back onto Merchants using automated means termed as Interchange Fee.

In summary, when interchange expenses are levied on the payment facilitation platform. The Facilitator can remit these expenses to Referrers who can then remit them to Merchants through an Interchange Cost and Interchange Fee setup. Ultimately resulting in Merchants reimbursing 100% of the Interchange Costs charged by the Facilitator:

Interchange Cost-Fee Setup Flow

The diagram below outlines a high-level flow diagram demonstrating Cost and Fee setup, and each step’s associated entity.

Example - Accel Debit Network “POS Switch Fee” Expense

In the example below, we’ll use a general amount and the Accel debit network POS Switch Fee charged by Accel to the Facilitator for processing payments made by their Accel-brand debit card.

1. Facilitator configures Interchange Costs for debit brand networks, charged to Referrers.

2. The Merchant submits a $15.00 Accel-branded debit card sale.

3. The Accel Network charges the Facilitator $0.10 for transaction handling.

4. The Referrer incurs $0.10 interchange Cost related to the Accel “POS Switch Fee” through the Facilitator’s configured Cost.

5. The Merchant bears 100% of the interchange expenses through the Referrer’s configured Fee when the transaction status is “Authorized”.

6. The Merchant receives the settled transaction amount in their available balance less the Referrer’s Fee.

Result: The debit Interchange Cost and Interchange Fees are fully configured giving all parties greater retention of their revenues and greater transparency for reporting and reconciliation when charged interchange Costs and Fees:

• The Facilitator has reimbursed the Cost of accepting debit interchange on the Accel network to the associated Referrer by establishing a "Cost" through the Referrer's Host.

• The Referrer reimburses the Facilitator-configured interchange Cost to them by using a "Fee" set up on the transacting Merchant(s) or Group(s).

• The Merchant can now handle all debit interchange Costs with greater transparency in reporting, empowering them to negotiate for lower interchange rates or seek guidance from their Referrer on strategies to minimize their Cost of accepting debit transactions.

Passing Debit Network Expenses as a Referrer Interchange Cost

Using the process below, a Facilitator can remit the various interchange expenses incurred from processing Merchant debit transactions to the Referrer that the associated Merchant is boarded to. This workflow uses a Cost, which is Referrer or Division-specific, rather than a Fee, which is Merchant or Group-specific.

1. Open the Fees Settings Page

Click Settings from the left-hand navigation panel to open the Settings page.

2. Add a Referrer or Division-specific Debit Interchange Cost

• Step 1: Click Fees in the Fees section of the Settings page to open the Fees Settings page.

• Step 2: Click the Add Cost button in the bottom right corner of the page to open the Add Cost lightbox.

• Step 3: When finished configuring the settings for the Interchange Cost, click the Add button to complete the process.

Result: The Interchange Cost is now configured to charge any Referrer when the debit network charges interchange expenses to the Faciliator for processing the Merchant transaction.

Passing Interchange Costs as a Merchant Interchange Fee

Using the process below, you can absorb 100% of interchange Fees for Merchant debit transactions and pass along those Costs to your Merchants as needed through a separate 100% interchange Fee assessed to that Merchant.

1. Open the Group Profile

• Step 1: Click GROUPS in the left-hand navigation panel to open the Groups page.

• Step 2: Locate the group in the table and click on any information in the table row to open the Group Profile page.

2. Add an Interchange Fee to the Group Profile

• Step 1: Click FEES in the list of tabs on the left-hand side of the page.

• Step 2: Click the Add Fee button in the upper right-hand corner of the page to open the Add Fee lightbox on the page.

• Step 3: Click the When to Schedule Fee drop-down menu and choose Interchange

• Step 4: Under How Much is the Fee select Percentage.

• Step 5: For the Amount set 100.00 for 100% of the interchange Fee.

• Step 6: Click ADVANCED OPTIONS to open the Advanced section.

• Step 7: Click the Conditional Rules drop-down menu and select Payment Card Type is.

• Step 8: Click on the drop-down menu that appears to the right of the Conditional Rules drop-down, and select Debit

• Step 9: Click the Add button to complete the process.

Result: The Merchant Group is now set up with a Fee structure that covers 100% of the Interchange Costs charged to the Referrer by the Facilitator for debit transactions, directly reimbursing the Referrer.

Debit Interchange Transaction Details and Reporting

We offer methods to review individual transaction interchange details and consolidated details to provide transparency into the Costs and Fees associated with debit interchange. For single transaction interchange information, visit the Transaction Details page for a debit transaction. For a more consolidated view of multiple debit transactions for a specified period, visit the Reports page on the Portal.

For Single Transaction Interchange Details

• Step 1: Access the Payment History page and click on the listed transaction.

• Step 2: From the Transaction Details page, use the following menus to view more details:

For Reporting on Debit Interchange for Multiple Transactions

Using the Reports page, you can generate any of the following reports, which will clearly identify interchange information for multiple transactions over a given time as well as with reconciliation-based reporting such as Disbursement Summary, Balance Details, and Profit & Loss Statements.

To generate a report with this information, access the Reports page and select one of the following options under the Generate Reports tab.

• Transaction Details

• Transaction Fees

• Profit & Loss Statements

• Disbursement Summary

• Disbursement Txn Details

• Balance Details

• Statement Details

• Interchange Reports