Every day, a large number of transactions taking place in a doctor's office are "pin-debit" eligible. This is where the patient pays with a debit card, the card is physically swiped as a credit, not debit, and the patient enters their 4-digit pin. Pin-debit transactions are processed over the bank networks and not the credit networks resulting in lower costs and fees. Less than 25% of practices use pin-debit, primarily because the card processors do not want it to be widely used.
Pin-debit is the lowest cost form of processing with the lowest actual pass-through cost and, typically, the smallest processor profit. The average cost on pin- debit transactions is 1%. This is based on the weighted average of the rate and item fee from the various bank networks. If you do not have pin-debit, these transactions are most likely coming through at "signature debit" interchange levels. Depending upon your plan type you could be paying anywhere from 1.4% to 2.10% if you have a tiered pricing plan or about 1.26% to 1.36% with a cost plus plan.
Pin-debit is also advantageous because processors historically could not mark up the rate, they can only mark up the item fee. But, as more and more businesses adopt pin-debit, the processors have looked
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