PIN Debit Card Payments

To provide full transparency into the Cost of Acceptance associated with debit card payment transactions, the Payrix platform offers direct debit network options for Cost configurations and Fee setups, so Referrers can pass along payment processing costs to the Merchants that generate them.

• As a Referrer, when you start seeing debit interchange costs from Payrix, the following capabilities should be automatically enabled for your platform account.

• For Merchants, adopting this feature will streamline transaction reporting and reconciliation processes by providing comprehensive details on debit-specific interchange fees from both your Referrer and the Payrix platform.

Available Debit Processing Networks

There are 11 debit card networks available, each with its own associated costs:

Accepting PIN Debit Payments

Debit card payment acceptance is the ability to receive debit card payments with a cardholder PIN, or signature. Alternatively, it encompasses the flexibility to accept debit card payments without a PIN for processing and settlement similar to traditional credit card transactions.

PIN Debit

A PIN debit card transaction is an electronic transfer of funds from the customer's bank to the Merchant's bank.

The customer uses a bank-issued debit card linked to a checking account and enters a PIN into a payment terminal at the point of sale. Merchants can enable the PIN entry feature from the Terminal (triPOS) perspective, but it is not auto-enabled for all Merchants. Debit card issuers trigger when a PIN is required, and triPOS EMV terminals respond by requesting a PIN triggered from the card issuer. The parameter can be enabled for Referrers and Merchants from a Division Profile or Group Profile’s Parameters menu.

This process also identifies the debit card network with Interchange Costs and clarifies card network assessment Fees similar to credit cards, mirroring credit card Fee structures for groups except for surcharge, as surcharge — a fee to the cardholder — cannot be assessed on debit transactions.

Fees offer Referrers a means to not only reimburse their platform Cost for the debit transaction through the Merchants processing them but also provide greater transparency to these Merchants with clearer reporting on the specific transaction Fees charged. This aids in daily or statement-based reconciliation, resulting in more accurate reporting for all involved Merchants.

How Debit Interchange Expenses Are Passed On

Each debit network has a variety of specific rates of expenses for processing, handling, and approving debit card transactions. These expenses are applied to the payment facilitation platform (Payrix) that enables Merchants to accept, process, and settle these transactions with their associated payment amounts.

Consequently, Payrix transfers these interchange expenses to the Referrers whose Merchants initiated the debit transaction interchange expenses.

When a Merchant conducts a debit card payment, Payrix is initially responsible for any associated interchange expenses upon transaction approval. However, these expenses are subsequently reimbursed through the Interchange Cost set up for the Referrer.

Fees

From the perspective of a Referrer when they incur an Interchange Cost through their setup related to a particular Merchant's expense triggered by a debit transaction, they also have mechanisms in place to pass this Cost on to the Merchant. This is achieved through an Interchange Fee, which involves setting up at either the Merchant or Group level as an event-triggered expense configuration accessible from the Fees menu on the Groups page.

Essentially, when Merchants accept payments via debit cards, interchange expenses are initially shouldered by Payrix upon transaction approval and then reimbursed through an Interchange Cost mechanism that automatically charges certain amounts when incurred by refunding it back directly. Finally, this reimbursement process entails charging 100% of such Costs incurred by facilitating entities like Referrers back to Merchants using automated means termed as Interchange Fee.

In summary, when interchange expenses are levied on the payment facilitation platform, Payrix remits these expenses to Referrers who can then remit them to Merchants through an Interchange Cost and Interchange Fee setup. This ultimately results in Merchants reimbursing 100% of the Interchange Costs charged to the Referrer by Payrix:

Interchange Cost-Fee Setup Flow

The diagram below outlines a high-level flow diagram demonstrating Cost and Fee setup, and each step’s associated entity.

Example - Accel Debit Network “POS Switch Fee” Expense

In the example below, we’ll use a general amount and the Accel debit network POS Switch Fee charged by Accel to Payrix tor for processing payments made by their Accel-brand debit card.

1. The Payrix configures Interchange Costs for debit brand networks, charged to Referrers.

2. The Merchant submits a $15.00 Accel-branded debit card sale.

3. The Accel Network charges the Payrix $0.10 for transaction handling.

4. The Referrer incurs a $0.10 interchange Cost related to the Accel POS Switch Fee through Payrix-configured Cost.

5. The Merchant bears 100% of the interchange expenses through the Referrer’s configured Fee when the transaction status is Authorized.

6. The Merchant receives the settled transaction amount in their available balance less the Referrer’s Fee.

Result: The debit Interchange Cost and Interchange Fees are fully configured, giving all parties greater retention of their revenues and greater transparency for reporting and reconciliation when charged interchange Costs and Fees:

• Payrix has reimbursed the Cost of accepting debit interchange on the Accel network to the associated Referrer by establishing a Cost through the Referrer's Host.

• The Referrer reimburses the Payrix-configured interchange Cost to them by using a Fee set up on the transacting Merchant or Group.

• The Merchant can now handle all debit interchange Costs with greater transparency in reporting, empowering them to negotiate for lower interchange rates or seek guidance from their Referrer on strategies to minimize their Cost of accepting debit transactions.

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Passing Interchange Costs as a Merchant Interchange Fee

Using the process in the following sections, you can absorb 100% of interchange Fees for Merchant debit transactions and pass along those Costs to your Merchants as needed through a separate 100% interchange Fee assessed to that Merchant.

Open the Group Profile

1. Click GROUPS in the left navigation panel to open the Groups page.

2. Locate the group in the table and select any information in the table row to open the Group Profile page.

Add an Interchange Fee to the Group Profile

1. Click FEES in the list of tabs on the left side of the page.

2. Click Add Fee in the upper-right corner of the page to open the Add Fee lightbox on the page.

3. Click the When to Schedule Fee dropdown menu and choose Interchange.

4. Under How Much is the Fee, select Percentage.

5. For the Amount, set 100.00 for 100% of the interchange Fee.

6. Click ADVANCED OPTIONS to open the Advanced section.

7. Click the Conditional Rules dropdown menu and select Payment Card Type is.

8. Click on the dropdown menu that appears to the right of the Conditional Rules dropdown menu, and select Debit.

9. Click Add to complete the process.

Result: The Merchant Group is now set up with a Fee structure that covers 100% of the Interchange Costs charged to the Referrer by Payrix for debit transactions, directly reimbursing the Referrer.

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Debit Interchange Transaction Details and Reporting

Payrix offers methods to review individual transaction interchange details and consolidated details to provide transparency into the Costs and Fees associated with debit interchange. For single transaction interchange information, visit the Transaction Details page for a debit transaction. For a more consolidated view of multiple debit transactions for a specified period, visit the Reports page on the Portal.

For Single Transaction Interchange Details

1. Access the Payment History page and select the listed transaction.

2. From the Transaction Details page, use the following menus to view more details:

For Reporting on Debit Interchange for Multiple Transactions

Using the Reports page, you can generate any of the following reports, which will clearly identify interchange information for multiple transactions over a given time as well as with reconciliation-based reporting such as Disbursement Summary, Balance Details, and Profit & Loss Statements.

To generate a report with this information, access the Reports page and select one of the following options under the Generate Reports tab:

• Transaction Details

• Transaction Fees

• Profit & Loss Statements

• Disbursement Summary

• Disbursement Txn Details

• Balance Details

• Statement Details

• Interchange Reports