How to determine type of payment source (credit or debit) online

August 13, 2010 9:51 AM

Is there a way to distinguish between online payments made from a debt card and a credit card?

I'm working with an organization that wants to do the best it can to prevent people from purchasing materials from them if they do so by incurring unsecured debt (e.g. credit card debt). If we had a way to distinguish between online debit and credit card payments, it would go a long way towards helping us in this process.

posted by scharpy to computers & internet (17 answers total)

Not a direct answer, but as a consumer, I would never use my debit card at a site that says I have to enter my PIN instead of using my debit card as a credit card(I think that is the only way to ensure it goes through as a debit purchase). The former means I'm liable for the charges no matter what (even if the site never delivers the product), and also means the site now may have my card and PIN number. The latter gives me credit card protections (fraud etc) even if it is technically my debit card that I used.
posted by Grither at 9:55 AM on August 13, 2010 [3 favorites]

You can probably work with whoever is processing your payments to block credit transactions but allow debit. This statement by Visa seems to say that it's possible to only accept debit or prepaid cards, but only if they are issued in the US. If you really do just want to distinguish between the two, that's probably also something you need to work with your payment processor to figure out how to do.
posted by burnmp3s at 10:03 AM on August 13, 2010

"...a site that says I have to enter my PIN instead of using my debit card as a credit card..."

Do such payment methods even exist in the online world? But I think your'e right -- at least in the case of the merchant account I set up for my wife's business, we have no ability to distinguish VISA payments made with a credit card versus a debit card.
posted by BurntHombre at 10:11 AM on August 13, 2010

Banker here.... the whole point of being able to use your check card like a credit card is just that, so I do not believe there is a way to prevent people from using a credit card without barring the use of a check card (as credit) also. You can go the route suggested above of forcing people to use it as a debit card but this will be very unpopular for a couple reasons.

First-see above-PIN use. I'm not sure exactly how this works online, I've never run into it. Second, a lot of banks charge for debit card purchases, not for ones that process as a credit card. I, for one, would not buy from you and incur this charge. Third, a lot of people tend to use credit cards, not check cards, online specifically because if your info lands in the wrong hands, you're not scrambling to pay the mortgage because your cash got swiped. The bank will fix it of course, but that takes time. Better to use your credit card and protect your checking account.

Honestly, a business that would only take an online check from me and not my credit card is a business I wouldn't transact with. Too big a risk to me, although your intentions are noble.
posted by supercapitalist at 10:11 AM on August 13, 2010 [1 favorite]

Another alternative for the OP would be to set up a system that only allows payment via ACH transactions, meaning that the charge is drafted from the customer's checking account and forgoes the need for a physical debit card. The advantages here are that more folks have checking accounts than have debit cards, and the fees charged as a part of the transaction are cheaper than a transaction involving VISA.

The disadvantage is that some people might feel a bit hinky about about providing their checking account number and ABA routing number for a one-time transaction.
posted by BurntHombre at 10:16 AM on August 13, 2010

Just throwing this on the pile.

I have a debit card, it never sees use on the internet because the internet is what Paypal and credit cards are for. There is just too much risk using a debit card as a credit card on the internet when I can just as easily use an alternative.

The idea of a website wanting me to put my PIN in and use the debit card as a debit card would not be something I would do, even if it was a site run by the federal government.
posted by 517 at 10:44 AM on August 13, 2010

I know that Verizon (for my landline service) is able to distinguish between credit cards and debit cards, and their webpage balks at accepting debit cards for credit transactions. They're pretty big and they might be negotiating that behind the scenes in some way though...
posted by yeoz at 10:58 AM on August 13, 2010

The talk radio host Dave Ramsey purports to only accept debit cards on his website, probably for the same reasons the OPs organization is considering. You might want to look in to what his site does.
posted by ChrisHartley at 11:05 AM on August 13, 2010

Yikes, never mind. They SAY they only accept debit cards but with the caveat that they can't actually tell what you use. So no, there probably isn't a way. ACH is your best bet.
posted by ChrisHartley at 11:07 AM on August 13, 2010

The last time I looked into this, it was not possible to process debit transactions online. There was no pin capture methodology approved for internet usage. When you accept debit cards via the VISA network, you are processing them as credit cards, with all of the associated merchant rules. There is no way to scan a VISA number and tell if it was issued as a debit or a credit card.

The only way around this that I know of is to do online ACH transactions (e-Checks) which have their own pitfalls.
posted by Lame_username at 11:09 AM on August 13, 2010

With my traditional merchant terminal (an old Linkpoint 3000), I've found that debit cards always come back with a six-character authorization code that starts with an alphabetic character, and those from credit cards are completely numerical.
posted by crapmatic at 11:13 AM on August 13, 2010

AEP (I think - I just moved so I've updated a ton of accounts lately) lets me pick between "pinless debit" and credit if I give them a debit card number for payment. I chose credit because I need 25 credit transactions a month to keep my free checking. But I think they must know what I'm using. Call Visa/etc., bearing in mind that your plan is not in their best interests and they probably have rules against barring credit but taking debit cards with Visa/etc. processing.
posted by SMPA at 11:25 AM on August 13, 2010

I'm intrigued. I want to ask what may be a silly question, because I'm not from the US and don't really understand your financial system: here's all the background. I don't have a credit card. I have a debit card, which is tied to my Paypal account. Any payments I make online come out of the same account, either via my debit card or Paypal. I have an authorised overdraft on my account. This means that it doesn't matter if my account's in credit or not, the money's still going to come out (actually, I'm pretty sure it would come out anyway, it would otherwise be an unauthorised overdraft and charge me higher rates and fees for the privilege).

In the US, is it not normal to be able to get an authorised overdraft on a current account? Is a 'Line of Credit' a completely separate thing? Is it closer to what I would describe as a personal loan?

(As to how this relates to the original question, over here, if someone had a setup offline that would take debit cards but not credit cards, I could totally use the unsecured debt of my overdraft to buy their product or service, and they would have no way of knowing. Of course, if I really wanted their product or service and they insisted that it had to be from an account in credit, I would take some money from elsewhere, possibly nonexistent money off a credit card, and transfer it to the account with the debit card so as to give the account the appearance of sufficient funds. I am aware that this would not necessarily be a clever thing to do, but suspect I would be annoyed at other people trying to decide themselves - for my own good - whether or not it would be sensible for me to buy their product or service.)
posted by Lebannen at 12:45 PM on August 13, 2010

@Lebannen-

In the US, many banks engage in some type of allowable overdrafts. That is different than a line of credit. Often, you can apply for a line of credit, tie it to your checking and that's great and gives you a back up plan. But most banks have policies that provide for people to go into the negative by some amount, a certain number of times per year/quarter/whatever. In my experience, they don't advertise this, you shouldn't count on it because they can change their minds about it, and they won't give you concrete answers on how much/how often. But it's a pretty common practice. Fees that are associated with that overdraft depend on the institution.

A line of credit is just that-you apply for it, you know how much you can use, what it will cost you, etc. Yes, a line of credit is a revolving personal loan-assuming it is not collateralized and they usually aren't.

Does that help at all?
posted by supercapitalist at 1:47 PM on August 13, 2010

Some people use their credit card to make all their purchases in a month, then pay it off completely. You really want to prevent those people from patronizing your business?
posted by asciident at 3:12 PM on August 13, 2010

supercapitalist, thanks, that was helpful.
posted by Lebannen at 4:36 PM on August 13, 2010

@asciident - you are completely correct, there are plenty of people that use their credit cards responsibly. This particular organization is non-profit that helps people with their finances (among other things), and it would be somewhat antithetical to allow credit card purchases.
posted by scharpy at 8:59 AM on August 16, 2010