Debit vs. Credit – Fees, funds and customer preference

Being a business owner, you want to have the most convenient options available for your customers, a big one being payment. Debit and credit purchases have outranked cash purchases and the only way to stay ahead of the game is to offer debit/credit.

When deciding whether to let customers use debit, credit or both to make a purchase, it’s important to consider the fees associated, availability of funds and what your customers might prefer.

Fees – The fees for credit transactions tend to usually be more then the fees for debit transactions. Credit card purchases charge a fee that is a percentage of the total purchase, where as the fee for debit transactions is a fixed rate. Typically it is cheaper for small business to process debit transactions.

Funds – When customers use credit, funds can take one business day if not longer before it becomes available in your merchant account, where as debit transactions is immediately debited from the customer’s bank account and deposited into your merchant account.

Customer Preference – The key to more revenue is keeping your customers satisfied. When deciding whether to accept credit or debit as payment, one of the most important factors to consider is your customer preference. Make your decision based on what will generate more transactions.

So, should your small business accept credit cards, debit cards or both?


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