Chip & Pin VS Chip & Signature: What’s the Difference?

Chip & Pin VS Chip & Signature: What’s the Difference?

A debit card can be processed as either a signature or PIN-based transaction and your business will incur different charges depending on which method you use.

Which is cheaper, PIN debit or signature debit?

A rough rule of thumb is that PIN debit transactions are cheaper for businesses with larger average transactions. Signature debit is cheaper for businesses with smaller average transactions

Signature Debit

A signature debit transaction is when you process a debit card by having your customer sign the sales receipt instead of entering her PIN number. It’s sometimes referred to as running the card “as credit” but it’s still considered a debit transaction.

Processing a debit card in this manner causes the transaction to be routed through Visa, MasterCard or Discover’s interchange instead of through a PIN debit network. For this reason, signature debit transactions are also referred to as offline debit transactions because the transaction takes place off the debit network.

Depending on which card brand’s logo is on the debit card, Visa, MasterCard or Discover’s interchange fee are used to determine the charge for a signature debit transaction.

PIN Debit

A PIN debit transaction occurs when a customer enter her personal identification number (PIN) to make a secure purchase. Processing debit cards using a PIN cause’s transaction’s to be routed through debit networks instead of credit networks. In the case of a PIN debit transaction, the debit network through which the transaction is routed will determine the charge for the transaction.

EMV Chip Cards

The type of authentication your customer will need to provide depends on the type of card they are using. Some cards require a PIN and some require a signature, so each time a customer checks out at your business it may be different. Generally speaking, most debit cards require a PIN and most credit cards require a signature. This is similar to what you might be used to from magnetic stripe cards, the only difference being the way in which the customer inserts their card into the EMV machine.

Which method is cheaper?

As noted in the introduction to this article, signature debit transactions are less expensive than PIN debit for businesses with smaller average tickets. PIN debit transactions are less expensive for businesses with larger average tickets.

The reason for the difference comes down to the fee structure of signature versus PIN debit transactions. Signature debit transactions have higher percentage-based fees and lower transaction-based fees. PIN debit transactions have lower percentage-based fees and higher transaction-based fees.

The processor’s markup also affects the cost difference. In the case of a signature debit transaction, the processor applies both a percentage-based and transaction-based markup.


At the end of the day, the security improvements far outweigh many of these frustrations. Once you find the process that works best for your business, you’ll feel confident that the sensitive data of your valued customers is well taken care of with EMV chip cards EMV isn’t going anywhere, so if you’re not yet accepting these cards or you’re not satisfied with your current process, reach out to A&B Payment and we can help! We have a team of expert Payment Consultants ready to advise you on the best solution for your business. Give us a call at 1-(888) 330-3974 or you can contact us via email at

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