Online Debit Transaction
An Online Debit Transaction is a real-time bank transaction that uses a personal identification number (PIN) for authentication.
These transactions are also referred to as PIN-debit transactions. They occur in real-time, with the amount of the purchase instantly deducted from the consumer’s bank account and transferred to the retailer’s account.
Online debit transactions offer a higher level of security compared to offline debit transactions, as they require the cardholder to enter their PIN, thus providing an additional layer of authentication. Furthermore, because these transactions are processed in real-time, the merchant can immediately confirm whether the transaction has been approved, and the customer can access an updated balance straight away.
This reduces the risk of insufficient funds or other issues that might cause the transaction to be declined at a later date. However, it’s important to note that while online debit transactions offer several benefits, they also have some drawbacks.
For example, they typically incur higher processing fees compared to offline debit transactions, and the merchant must have a real-time connection to the payment processor, which may not always be possible in remote or low-connectivity areas.