What is a POS debit card transaction?
A POS (Point of Sale) debit card transaction refers to a payment made using a debit card at a merchant’s point of sale terminal. When you make a purchase with your debit card at a physical store or shop, you typically use the card at the merchant’s electronic payment terminal. This type of transaction is known as a POS debit card transaction.
A POS (Point of Sale) debit card transaction refers to the use of a debit card to make a purchase or payment at a physical retail location or merchant’s point of sale terminal. When a debit card is used for a POS transaction, the cardholder typically swipes, inserts, or taps the card at the merchant’s card reader, and the transaction is processed electronically in real-time.
Here’s how a POS debit card transaction generally works:
- Card Presentation:
- The cardholder presents their debit card to the merchant at the point of sale, either by swiping the magnetic stripe, inserting the card into a chip reader, or tapping it if the card supports contactless payments.
- The merchant’s point-of-sale terminal communicates with the cardholder’s bank (issuing bank) to check if there are sufficient funds in the cardholder’s account to cover the purchase amount.
- If there are sufficient funds, the transaction is approved, and the cardholder’s account is debited for the purchase amount. If there are not enough funds, the transaction may be declined.
- Signature or PIN:
- Depending on the country and the specific debit card, the cardholder may be required to provide a signature or enter a Personal Identification Number (PIN) to complete the transaction.
- Transaction Record:
- A record of the transaction is generated, and the cardholder receives a receipt. The merchant’s records are also updated to reflect the sale.
POS debit card transactions are a common and convenient way for consumers to make purchases, and they provide a quick and efficient means for merchants to receive payment. Debit cards can be used at various types of merchants, including retail stores, restaurants, and other businesses with point-of-sale terminals.
Now we are going to know What is a POS debit card transaction?
Here’s how a POS debit card transaction typically works:
- Card Swiping or Insertion: You either swipe your debit card or insert it into the merchant’s card reader machine.
- Authorization: The merchant’s payment terminal communicates with your bank or financial institution to verify the availability of funds in your linked bank account.
- PIN Entry: For a debit card transaction, you may be required to enter your Personal Identification Number (PIN) on the terminal keypad to authenticate the transaction.
- Transaction Approval: If the necessary funds are available in your bank account and your PIN is correct, the transaction is approved, and the purchase amount is deducted from your account.
- Receipt Generation: The merchant’s payment terminal generates a receipt, which you may be asked to sign or provide your digital signature.
POS debit card transactions are a common method of payment for in-person purchases at retail stores, restaurants, supermarkets, and other businesses. They offer a convenient and secure way to make payments directly from your linked bank account using your debit card.
A POS or “Point of Sale” transaction is a purchase made with your Visa debit card and you are required to enter your PIN on a keypad. POS transactions post to your account immediately. On your statement, a POS transaction will show the amount and the address (and sometimes) the name of the merchant.
“POS” and “POS debit” are the two most common terms that will appear on customer statements when they use their debit card at the checkout online or cash register in person. POS, as we know, is the point of sale terminal that allows transactions to be made with a tap, swipe, chip, or key.
Why does a POS transaction read ‘decline’ yet the cardholder was debited?
It happened to me last year, my debit card was declined to pay my petrol bill, the employee tried again the same reply but I received sms from the bank that the due amount has been debited I handover a different bank debit card which was immediately accepted. I reported it to my bank it took one month to get the money back I had to produce a copy of the petrol Station sales report for the day of the sale.
A POS machine declined my transaction but I have been debited. What should I do?
In this case, the amount must credit to your account within a period of 7 days. There are cases where this amount is not credited to your account but are very rare. In such a case one must keep all the transaction IDs in hand and must keep a screenshot of the failed payment. In the case of a POS ask the store to give you a written document with their transaction ID and the date of purchase at which the transaction declined. This case would not likely take place.
How does debit card transaction processing work?
Step 1: POS Device or App/Website initiate payment either using swiping the Debit Card on the POS device or entering the Cards details such as Card Number, Expiry Date, and CVV on App or website.
Step 2: Terminal (POS Device) and App / Website redirect to their payment gateway company.
Step 3: Payment Gateway Company verifies all details.
Step 4: if details are found correct then PG sends a request to the bank and the next step else return directly to step
Step 5: bank Verifies all details and also checks the available balance and deducts the same amount and returns to the payment gateway with success or failure transaction.
Step 6: payment gateway verifies the returned result
Step 7: Payment gateway redirects the result to the POS terminal or App/Website with transaction status(success, failed, pending), transaction amount, transaction id, etc, etc.
Why are debit and credit cards processed differently at POS?
Because they are two different types of transactions.
Debit cards transfer funds from your account to the merchant’s account right away. The POS needs to:
- Determine if the account is active
- Determine if your bank reports that you have the funds. (Banks may report you have it even when you don’t, and then charge you an overdraft fee!)
- Authorize the transfer
- Perform the transfer. (Though I have to admit I don’t know if all debit card transactions are completed right away, or if they queue up for the once-a-day batch process.)
Credit cards transfer the funds to the merchant account nightly, and charge the amount to your account for you to pay off by your due date. The POS needs to:
- Determine if your card is active
- Determine if the card issuer is willing to accept the charge
- Authorize the charge
- Complete the transaction, which happens in a batch once a day (at like 4 am).
How do I track a POS transaction done on my account?
To track a point of sale (POS) transaction done on your account,
- Check your Receipt:
If you made the transaction in person and received a printed or electronic receipt, it usually contains information such as the transaction date, time, and merchant details. Review the receipt for any relevant information.
- Review Your Bank Statement:
Regularly monitor your bank account statement, either online or through your bank’s mobile app. Look for the transaction in question by matching the transaction amount and date with the information on your receipt. It should be listed as a debit or withdrawal on your statement.
- Contact Customer Support:
If you cannot locate the transaction details on your receipt or bank statement, reach out to your bank or card issuer’s customer support. Contact their helpline or visit their website to find the appropriate channel for reporting or inquiring about transactions. Provide them with relevant information like your account details, transaction date, and approximate amount. They should be able to assist you further by investigating the transaction and providing additional information.
- Online Account Access:
Some banks offer online banking services that provide transaction history. Log in to your online account, navigate to the transaction history section, and search for the specific transaction using the available filters like date range, transaction type, or merchant name.
- Mobile Wallets:
If you made the transaction using a mobile wallet such as Apple Pay, Google Pay, or Samsung Pay, you can typically review your transaction history within the corresponding app. Open the app, find the transaction history section, and locate the specific transaction.
Are there any 2% extra charges on card payments through POS?
No, there are no such charges at least officially or ethically.
But, Yes most of the merchants ask for this and it is illegal.
Why do they do it? Because POS vendors/banks when they get into partnering with these merchants typically deduct 1.5–2% from the transacted amount and payout the remaining to these merchants. So, in order to save this 2% – mostly greedy and ill-informed merchants pass this on to customers taking it as granted.
What can the Customer do? [apart from questioning/confronting or walking to different merchant]
We can raise a complaint against these merchants and this is the most ideal scenario and trust me, these complaints are indeed taken seriously and most probably your extra charges will be credited back to your respective account.
Annoyingly, nowadays even for Paytm transactions merchants are asking for these charges.
If a payment is made at POS and a receipt of the transaction is obtained, can it happen that there is a reversal of the transaction after 10 days?
You don’t make clear in your question whether you are the cardholder or the merchant.
We always tell our merchant clients to retain any documentation related to a credit card sale for at least 6 months. We have seen chargebacks (reversals) come in up to 6 months after a sale. So that’s from the point of view of a merchant.
From the point of view of a cardholder (customer), I believe that most card issuers (banks) will allow a chargeback for also for up to 6 months, but some may place a shorter limit. That part I don’t know. There are a lot of card issuers and there may be some different policies out there.
What is a debit card “offline” transaction?
An offline debit card is a type of automated payment card, similar to a traditional debit card that allows a cardholder to pay for goods and services directly from their bank account.
An offline debit card transaction creates a debit against the cardholder’s bank account. These types of cards may be issued to bank customers along with standardized checks. Offline debit cards differ from traditional debit cards in that they do not require a PIN number for the transaction. All that is required during the transaction is the user’s signature.
Offline debit cards are issued by banks in partnership with a card network processing services provider such as VISA or Mastercard. These cards are associated with a customer’s bank account. They can usually only be used for payments and are not available for making withdrawals or deposits from an ATM
Offline debit cards typically will often have a maximum daily limit that is lower than a standard debit card. If this is not the case, the maximum amount is based on the funds held in the underlying bank account.
What is the difference between a debit card and a credit card?
Very Simply –
- Debit Card – the money you are spending is your own and is drawn from an account you have with the bank/institution issuing you the debit card. No money in that account? No spendy.
- Credit Card – the money you are spending is the banks and at the end of each month the bank/institution will issue you bill letting you know how much of their money you’ve spent, how much in total you owe them and how much they require you to pay this month. There is of course usually a limit to how much of the bank’s money they will allow you to use if you have used all of those funds – no spendy.
Can POS machines be linked to savings accounts?
Yes, you can link the POS machine to a savings account too. This is practiced by many small business owners. To check further details required for the application, you could contact the bank whose account you would like to link.
However, it is advisable to link the POS to the current account of your business. This helps in maintaining the audit documents. You can open both corporate or domestic current accounts with any of the banks. Owning a current account gives you more flexibility in transactions and discounts too.
How do I stop POS charges debit?
If you choose to use a debit card for checkout rather than a credit card, your store may charge a POS charge. This additional fee is typically about one dollar or less and is typically charged by your bank. You can contact your bank if you want to find out more information about these charges.POS charges are fees that occur when you use a debit card at a retail location. Most POS charges happen because retailers choose to process credit cards through a credit card network instead of your bank. These fees are not the fault of your bank.
A POS charge can also be an additional fee that your bank charges when you use your debit card. If you choose “Debit” at checkout and use your PIN, banks sometimes charge an extra fee. Not all banks charge POS service fees. Check with your bank before completing a purchase if you want to avoid this charge.
How can I cancel a pending transaction on my debit card?
Got scammed on Let go They already took it two times Now the other 140 or so is still pending I cut off the bank card, which was temporary because I lost my old one last week. I cut off the bank card from the account Should that help Desperate and feeling stupid after years of being okay online with my small business?
Why don’t credit cards require a PIN number when it’s swiped or scanned? Is it a matter of “convenience”?
Credit card transactions can be “secured” for the merchant (basically, verified that the authorization received was requested by the cardholder) in four ways:
- PIN and chip – The card is dipped into the machine, and the cardholder enters their PIN. This is considered the most secure, and (in those merchant accounts with varied fees) carries the lowest charge to the merchant (by 0.1–0.5%). The downside of this method is that it requires a relatively recent processing machine, and can’t work with cards that do not have the chip (there are still some, not many and the number is constantly diminishing, but there are still some).
- Card and Signature – The card is dipped into the machine or swiped via an old-school reader, or even mechanically “knuckleduster” using the old-school carbon machines, and the cardholder signs. this is considered secure and carries a moderate degree of risk. It does cost the merchant slightly more than method #1, but it does not require a modern reader, and it works with any card. That is perceived as an advantage by some merchants.
- CVV Code – This is the only effective way that a merchant can get a verified rate on an internet purchase. The cardholder is expected to enter the three-digit code on the back of the card. This carries more risk than the above (if the card has been physically stolen, for example), but is still considered “validated”, therefore the merchant is insured against loss.
- “Validation not required” – For small transactions (under $25 or so, depending on the merchant’s risk profile as determined by their processor), the card does not have to be verified by PIN or chip at all. This transaction is the fastest for the merchant, as they do not have to wait for validation. however, it is also the riskiest, as they are not insured against loss due to fraud at all. Places like fast food restaurants and the like use this because speed is their business.
It is up to the merchant to decide what method they will use, in consultation with their merchant card processor, who will have a say in what they are prepared to allow the merchant to use and what rates they will charge.
So, for some transactions, you may indeed not be asked to validate your card by any method. It’s okay, it just means the merchant is accepting a little risk in exchange for faster authorization.
Why does a POS swipe not require my PIN?
It depends on what method you’re using (regular magnetic stripe vs chip/EMV), how their hardware is set up, and what services are active on their merchant account. For example, a POS swipe at a restaurant probably won’t ask for a PIN because:
- They don’t have debit turned on at the merchant account level.
- Their POS system doesn’t physically have a PIN pad.
- Their POS system has debit turned off / doesn’t support PIN debit (might work in the future).
Sometimes PIN debit can cost a business more than non-PIN debit so they would have it turned off.
For regular credit cards (non-debit/non-check cards) they would only have a PIN when using the chip/EMV, and most US bank-issued cards are chip and sign, not chip and PIN.
It usually boils down to one or more of these things which could be on the merchant side and / or the cardholder / issuing bank side depending on what country you’re in, what kind of card you have, what POS hardware and software is being used and their capabilities (if you’re in the US I’m sure over the last year or two you’ve seen a lot of new credit card accepting hardware around and a lot of it has chip card readers but that chip reader portion isn’t/wasn’t working), as well as what choices they’ve made with their merchant services provider as to accept PIN-debit or not.
What is a POS debit card transaction?