Chip & PIN vs. Chip & Signature: What’s the Difference?

 In CC Processing

EMV Chip Cards

The type of authentication your customer will need to provide depends on the type of card they are using. Some cards require a PIN and some require a signature, so each time a customer checks out at your business it may be different. Generally speaking, most debit cards require a PIN and most credit cards require a signature. This is similar to what you might be used to from magnetic stripe cards, the only difference being the way in which the customer inserts their card into the machine.

Running Debit “As Credit”

Many credit card processing machines will provide the option to skip the PIN step and run a debit card “as credit”. If a customer chooses to skip the PIN step, they will be prompted to sign for their transaction instead. Although this is typically referred to as running the card “as credit”, it’s technically still considered a debit transaction.

The difference comes from how the transaction is ultimately processed behind the scenes, which then affects the interchange costs for the transaction. Debit transactions authorized by PIN are run through the debit networks, whereas transactions authorized by signature are run through VISA, Mastercard, Discover, or American Express.

As a general rule, debit cards authorized through PIN have less expensive interchange rates, so while you’re looking for the right credit card processing machine for your business, make sure you get one that features a PIN pad, giving your customers the option to authorize through PIN instead of forcing a signature each time.

The Cost of Running EMV Chip Cards

The inherent cost of running chip-enabled card is no more or less than running a magnetic stripe card. Your interchange rates are the same for comparable cards, but that doesn’t necessarily mean that your overall costs are the same. By choosing to accept EMV compliant cards, you’re saving your business from the potential risk of being liable for fraudulent activity – potentially saving you millions! In addition, some payment processing providers charge an “EMV Non-Compliance” fee. In the long run, accepting EMV cards is the right decision for any brick-and-mortar business.

Matrix Payment Systems would be glad to help you evaluate your credit card processing costs.  We offer a FREE evaluation for your business – Go To Merchant Form

Recent Posts