Accept debit cards and pay less on every sale

When you accept debit cards, you are usually taking the cheapest card in a customer wallet. On a regulated debit card, the one issued by a large bank, federal law caps the interchange at 0.05 percent plus 22 cents. That is a real number, set by the Durbin Amendment, and it is far below what a rewards credit card costs you. If a chunk of your sales run on debit, that alone pulls your average cost down.

Why is debit cheaper than credit?

Debit is cheaper because the money is already in the customer account and there is no rewards program to fund. A credit card charge is a short-term loan with fraud risk and, often, miles or cash back that someone has to pay for. That someone is partly you, through higher interchange. A debit charge just moves money that already exists. Less risk and no rewards to bankroll means the networks set lower interchange on it.

The gap is not small. A rewards credit card taken at the counter can carry interchange in the 1.9 to 2.3 percent range. A regulated debit card is capped at 0.05 percent plus 22 cents. On a fifty dollar sale, that cap works out to about 25 cents in interchange. The rewards card on the same sale could be a dollar or more. Same purchase, very different cost to you.

The dime we charge is the same on a debit sale and a rewards sale. What changes underneath is the interchange, and debit carries the lowest interchange there is.

What is the difference between PIN debit and signature debit?

PIN debit runs the card through a debit network with a typed PIN; signature debit runs it over Visa or Mastercard like a credit card. Both pull from the checking account, but they take different rails and can price differently. For regulated cards from large banks, the Durbin cap applies either way, so the difference is smaller than it used to be. For debit from smaller banks, which are exempt from the cap, routing can matter more, and a good processor helps route to the cheaper network where it is allowed.

• PIN debit: the customer taps or dips and enters a PIN. Runs on a debit network. Often the lowest cost, especially on unregulated cards.
• Signature debit: no PIN, runs over the credit rails. Simpler at the counter, sometimes slightly higher cost on unregulated cards.
• Regulated versus exempt: large-bank debit is capped by law. Small-bank and credit-union debit is exempt and can cost more, which is where smart routing earns its keep.

How does encouraging debit lower my real cost?

Encouraging debit lowers your cost because it shifts sales from higher-interchange credit onto the cheapest rails available. You cannot refuse credit and only take debit, and you should not try. But you can make debit the easy, obvious choice at the counter. A PIN pad that prompts for debit first, a small sign, a cashier who simply asks, all of it moves the mix. Even a modest shift adds up over a year of sales.

Consider an illustrative shop doing 45,000 dollars a month across about 1,500 sales. If even a fifth of those sales move from a rewards credit card to regulated debit, the interchange saved on that slice is real money, and it repeats every month. We do not charge more to take debit than credit, so every dollar of interchange you avoid is a dollar off your bill, not a dollar we claw back somewhere else.

A caution worth stating plainly: do not add a fee to debit to steer customers. Surcharging debit is restricted, and the rules around surcharge and cash discount vary by state and changed in 2025 and 2026. Steer by convenience and habit, not by penalty. We keep your program current with the rules, and this is general information, not legal advice.