A debit transaction is classified online when the cardholder’s 4 digit PIN number is entered at point of sale via a PIN pad on a credit card terminal. Since it is not possible at this time to enter a PIN number on internet or other types of card not present transactions, this only applies to face to face credit card processing. By entering the 4 digit PIN the transaction is routed through the debit network vs. the Visa/MasterCard network. Since the cardholder is entering a 4 digit PIN number (only known by them) and the transaction is routed through the debit network, merchants usually pay a lower rate to process a PIN based debit transaction.

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