[kansasr]

Originally Posted by Pugchief

This information is misleading if not flat-out wrong.

Using a debit card in a PIN based transaction costs the merchant less than using a credit card. But if you sign instead (virtually all restaurants), the merchant is charged the same rate as a credit card.

Also, while the rate varies based on average monthly volume, we were paying $0.50 to $0.75 for debit card PIN transactions, not $0.05.

You should also know that PIN based debit card transactions are more secure (thus the lower fee) and generally speaking, credit cards offer better protection against fraud. I only use my debit card for ATM withdrawals, and credit cards for any purchase.

The sad reality is that more and more merchants are tacking on a fee to use cards. It's understandable when you realize they are losing ~3% on every transaction, which over time really adds up. $10,000 in monthly volume means losing $3600+ each year. The real question is why banks are charging merchants 3%+ when the actual cost to them IIRC is less than 1%. Even with a profit built in, 3% is ridiculous. But the extra fees help pay for rewards cards that offer cash back or airline miles.

Your math is WAY off