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Consumer Protection

PIN Vs Signature – What's the difference?

- Lee Washam, CharterBank President

Have you ever wondered what the difference is between signing to use your check card and using your PIN to make a purchase? Although the result of the money coming out of your account is the same, there are several main differences:

  1. PIN (Debit) and Signature (Credit) transactions are processed on different networks and have a different cost to the merchant. Generally, PIN transactions have a lower cost to the merchant; therefore many merchants encourage PIN transactions. On PIN transactions, the money is taken out of your account immediately.

  2. A Signature transaction processed through the most common card networks, such as MasterCard and Visa, generally takes a little longer to be deducted from your account. Further, these networks can have a greater level of fraud protection with Mastercard offering “Zero Liability” on Signature transactions. PIN transaction protection varies with the network, some limiting your loss to the first $50.

With either transaction, the money comes out of your account. The major difference is, if you ever have a disputed charge, it is a lot easier to prove you didn’t sign than it is to prove someone must have stolen your PIN.

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