Terms to Know

Debit

A charge to a customer’s bankcard account. A transaction, such as a check, automated teller machine (ATM) withdrawal or point-of-sale (POS) debit purchase that debits a demand deposit account.

Debit Card

A type of payment card used for transactions carrying one of the major association brands that is linked directly to a customer's bank deposit account.  ATM and some point of sale transactions require input of a four digit personal identification number, while other transaction may require a customer's signature.  Debit card transactions don’t involve credit, but rather transfer money directly from the customer’s checking account to pay for the product or service involved.

Discount Fee

Also called the “discount rate.”  The fee paid by merchants to credit card processors as a fee associated with accepting general use credit cards (like Visa, MasterCard, American Express and Discover Card).  Typically this fee runs between 1% and 3%, depending on the nature of the transaction.

Discover Card

Newest of the payment card brands, began in 1986.   Company now has over 50 million card members, but is the smallest of the four payments brands in terms of market share.  Discover Card’s payments networks:  Discover Network and PULSE:  together processed more than 3 billion transactions in 2006. Discover Network connects millions of merchant and cash access locations throughout the U.S., Canada, Mexico, Central America and the Caribbean. PULSE serves more than 4,400 financial institutions and includes nearly 260,000 ATMs, as well as POS terminals nationwide.

Durbin Amendment

A late addition to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, designed to reduce swipe fees charged to merchants by financial institutions, and thereby reducing merchant costs (and so, by extension, costs to consumers). The Durbin Amendment is a highly debated change to the processing system, with many detractors suggesting its emphasis on interchange fees—without addressing other fees that can be added to transactions—as ultimately ineffective or even raising the costs of handling electronic transactions.