Most point-of-sale terminals offer two options before processing your payment. Let's look at what happens when you select each after swiping or inserting your chip card:
Credit card. After swiping your credit card, you'll have to sign for your purchase. Alternatively, if your card has a chip, you can insert it into the terminal's chip reader and enter your pin number. When you enter a pin, you usually won't have to sign the receipt. Your transaction is processed through the network on your card — typically Visa or Mastercard, and your merchant pays a fee equal to a percentage of your transaction. Your purchase is added to your card's monthly statement.
Debit card. You enter your 4- or 6-digit PIN number, and your transaction is processed through a payment processor system like Moneris. Your merchant will also pay a fee for debit transactions. The amount of your purchase is deducted from the chequing or savings account associated with your card.