What Is a Signature Based Debit Card Transaction?

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A signature-based debit card transaction is one that is processed offline. Your signature is required at the point of sale when you make your purchase. A signature-based debit card transaction has pros and cons when compared to other methods of purchasing.


A signature-based debit card transaction is cheaper for retailers than a pin-based transaction, which occurs online. Credit card and signature-based debit card transactions are processed in similar manners.


Signature-based debit card transactions can be processed over the phone and on the Internet. No pin number is required for these transactions. These transactions are convenient for people that don’t have access to a credit card.


Whenever your debit card transaction is signature-based, it takes approximately two to three days before the transaction goes through. Pin-based transactions are processed immediately.


A signature-based debit card transaction does not allow you to receive cash back when you make your purchase at retail outlets. This feature is only available for pin-based transactions.


With signature-based debit card transactions there is a higher potential for fraud. Many retailers do not ask for identification when you sign for your purchases. If someone finds a card, he can make purchases with little effort.


About the Author

Melvin J. Richardson has been a freelance writer for two years with Associated Content, and writes about topics such as banking, credit and collections, goal setting, financial services, management, health and fitness. Richardson has worked for several banks and financial institutions and gained invaluable experience and knowledge. Richardson holds a Master of Business Administration in Executive Management from Ashland University in Ashland Ohio.

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