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A Look at Signature Debit Rates for Merchants

Last updated 6 years ago

Every time your business accepts a signature debit transaction, you pay a fee. Recent changes in Visa’s policies have altered signature debit rates; read on to find out how this could affect your business.

How Signature Debit Rates Work

Signature debit rates are a type of interchange fee, a fee you pay for using an electronic payment system. When a customer makes a signature debit purchase at your business (as opposed to a PIN-based transaction), the card is processed as a credit card transaction, and the credit card company takes a percentage of the sale, plus a small flat fee, as payment. Though this is cheaper than an actual credit card transaction, it is significantly more expensive than a PIN-based debit transaction. Although government regulation for these fees is being considered, at the moment they are still controlled by card companies like Visa and Mastercard.

Trends in Signature Debit Rates

Visa recently changed its signature debit rates. The previous fee was 1.03% of the transaction, plus $0.15. This changed to 0.95% of the transaction, plus $0.20. This looks like a good thing for merchants, however, the actual impact of this change depends on the average size of your tickets. Take, for example, a $10 transaction. With Visa’s old rates, you would have paid $.253; with the new rates, you will pay $.295. However, larger transactions will be cheaper. A $200 ticket used to cost you $.2.21 through Visa; now it is $2.10. These additional savings—or costs, if your tickets are smaller—will add up.

Getting a handle on merchant services and interchange fees can be confusing. At Merchant Advocates, we’ll help you get the best deal for your business, and then we carefully monitor the results of our work to make sure you’re getting the savings we promised. Call us at (732) 727-2073 for more information.


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