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For most businesses, debit beats credit on price -- and smart processing makes it even cheaper.
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Debit cards and credit cards often get lumped together, but they’re not the same. Credit cards let the issuing bank front the money, while debit cards pull it straight from a customer’s account. That makes debit transactions lower risk — and usually cheaper — for merchants.
Merchants need to understand debit card processing fees — not just because they differ from credit card fees, but because a smart acceptance strategy can save you money. In this guide, we’ll cover what these fees are, how much they cost, how they’re regulated, and how you can avoid overpaying.
Table of Contents
Whenever a customer pays with a debit card, a fee is charged for moving that money from their account to yours. These fees aren’t just a flat number; they’re based on these factors:
Basically, your total cost is the sum of your network fees and your processor’s markup. Understanding this structure is key to keeping fees low.
According to the Federal Reserve, the average fee in 2023 was about $0.23 per transaction, or 0.65% of the transaction value. For comparison, credit card fees average around 1.4%
The Durbin Amendment (part of the 2010 Dodd-Frank law) caps fees for large banks (over $10 billion in assets) at:
0.05% of the transaction value
$0.21 per transaction ($0.22 if fraud is suspected)
This cap applies to both card-present and online transactions.
Smaller banks aren’t regulated, but competition usually keeps their fees close to these levels.
When a debit card is used, your transaction goes through a network (PIN or credit card) and incurs interchange fees. Your processor adds a markup depending on your pricing plan.
Factors that determine your interchange fees include:
When a customer pays with a debit card, the transaction can be processed in two ways: PIN debit or signature debit.
With PIN debit, the customer enters their PIN at the terminal, and the payment runs through a PIN debit network like Interlink or Maestro.
Fees here usually mean higher fixed costs per transaction but lower percentage fees, which makes PIN debit better for large-ticket sales. For very small purchases, though, those fixed fees can make it more expensive than credit cards.
With signature debit, the transaction runs through the major credit card networks — Visa, Mastercard, Discover, or Amex — just like a credit card. Instead of a PIN, the customer signs or simply authorizes the purchase.
Fees here tend to be the opposite of PIN: lower per-transaction charges but higher percentage fees, making signature debit more cost-effective for smaller ticket sizes. Online and manually keyed-in debit purchases also fall under this category, since there’s no PIN option.
Overall, PIN debit is safer since fraudsters rarely have the cardholder’s PIN, while signatures are easy to forge. That’s why Mastercard and Visa have dropped signature requirements for most transactions.
These are the types of fees charged by the payment networks that process PIN-authenticated debit transactions:
| Fee Type | What It Is |
|---|---|
| Percentage Rate | Percentage of the transaction |
| Transaction Fee | Fixed fee per transaction (also known as an authorization fee) |
| Flat Switch Fee | Fee for routing through the network ($0.03–$0.10) |
| Annual Fee | Flat yearly fee for network participation (optional) |
| Non-Interchange Fees | Extra fees for cross-border or non-US cards |
If the issuing bank is large enough to fall under the Durbin Amendment, debit transaction fees will almost always be fixed at the maximum amount allowed by law.
Large banks generally stick to this maximum, since it’s already far lower than what smaller, exempt banks can charge.
For smaller banks and credit unions that aren’t subject to Durbin, there’s no hard cap. Fees vary by network and transaction type, and can be much higher, especially for prepaid debit or very small purchases (under $15).
Here are some average costs for each network based on data from the Federal Reserve (Exempt Network Averages, 2023):
| Network | Avg. Fee (% of Transaction Value) |
|---|---|
| ACCEL | 0.56% |
| AFFN | 0.60% |
| ATH | 0.46% |
| Culiance | 0.55% |
| Interlink | 0.60% |
| Jeanie | 0.51% |
| Maestro | 0.58% |
| NYCE | 0.70% |
| PULSE | 0.63% |
| SHAZAM | 0.64% |
| STAR | 0.51% |
| UnionPay | 0.91% |
Signature debit — or “running debit as credit” — bypasses PIN debit networks and instead routes through the Visa, Mastercard, Discover, or Amex networks. Instead of a PIN, the customer signs (or enters a CVV online).
Because these payments run on the credit card networks, the fees look more like credit card interchange: higher percentage-based charges, but usually lower fixed per-transaction fees. On average, here’s what you can expect:
| Type of Transaction | Avg. Fee (% of Transaction Value) |
|---|---|
| Covered PIN | 0.61% |
| Covered Signature | 0.56% |
| Exempt PIN | 0.67% |
| Exempt Signature | 1.41% |
To avoid overpaying for debit card transaction fees, you’ll need to create a strategy that works for your business. Here are a few dos and don’ts to get you started:
For most merchants, debit cards are absolutely worth it. With most U.S. debit transactions capped under Durbin, they’re cheaper than credit—and with the right processor and setup, you can keep your costs even lower.
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