Cynical Posted October 31, 2010 Share Posted October 31, 2010 Not sure what you mean here. I pay no fee, not even a penny, for debit transactions of any kind. I use a small Credit Union, for what it's worth. As far as the vendor is concerned, the cigar shop I frequent prefers you pay by debit, as opposed to credit, if given the choice. I forget if they pay a lower fee, or if they get their money quicker, when the customer chooses "debit". Either way, I am only charged the amount of the sale. To clarify/simplify: Pay by credit: vendor/retailer eats the transaction fee Pay by debit: bank/consumer eats the transaction fee That's why the cigar shop prefers you to pay by debit. He doesn't get charged the transaction fee. Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted October 31, 2010 Share Posted October 31, 2010 To clarify/simplify: Pay by credit: vendor/retailer eats the transaction fee Pay by debit: bank/consumer eats the transaction fee That's why the cigar shop prefers you to pay by debit. He doesn't get charged the transaction fee. Exactly... BINGO! That is why when you swipe your debit card... It automatically takes you to the pin screen. On many systems, one has to press cancel to get "credit." I imagine, the merchant can get a lot of people to use their pin and eat the fee. Maybe it isn't the customer eating the fee, but it is the bank. Isn't it like $.25 or something?? Link to comment Share on other sites More sharing options...
Chilly Posted October 31, 2010 Share Posted October 31, 2010 To clarify/simplify: Pay by credit: vendor/retailer eats the transaction fee Pay by debit: bank/consumer eats the transaction fee That's why the cigar shop prefers you to pay by debit. He doesn't get charged the transaction fee. That's not true. Either way, the vendor is going to get charged a fee. It's just that with debit, he gets charged less of a fee. Here's what happens when you use both online and offline transactions: - The full amount of the purchase is deducted from your bank account. - The bank that issued your card keeps a significant portion of this amount as a processing fee (this is the largest portion). - The bank that the merchant is using keeps a cut for processing this side of the transaction - The merchant receives the rest of the money. Then, based off of your card-issuing bank's agreement with VISA/MasterCard, the card network you used gets a portion of the fee that your bank kept. Overall, online debit card processing fees are lower because they are instant and more secure. There's relatively no chance for things like chargebacks, and identity theft changes are a ton lower because a PIN is required. As a result, interchange fees for are significantly lower for debit card processing than credit card processing. In order to make up for the less revenue from online debit card transactions, some banks charge their customers a fee each time they use their debit card. It's somewhere between a .6% and 1% average difference between online & offline transaction fees. Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted October 31, 2010 Share Posted October 31, 2010 That's not true. Either way, the vendor is going to get charged a fee. It's just that with debit, he gets charged less of a fee. Here's what happens when you use both online and offline transactions: - The full amount of the purchase is deducted from your bank account. - The bank that issued your card keeps a significant portion of this amount as a processing fee (this is the largest portion). - The bank that the merchant is using keeps a cut for processing this side of the transaction - The merchant receives the rest of the money. Then, based off of your card-issuing bank's agreement with VISA/MasterCard, the card network you used gets a portion of the fee that your bank kept. Overall, online debit card processing fees are lower because they are instant and more secure. There's relatively no chance for things like chargebacks, and identity theft changes are a ton lower because a PIN is required. As a result, interchange fees for are significantly lower for debit card processing than credit card processing. In order to make up for the less revenue from online debit card transactions, some banks charge their customers a fee each time they use their debit card. It's somewhere between a .6% and 1% average difference between online & offline transaction fees. Thanks for the info. Blue! With my one account... The charge may stay "pending" for several (3-4 days) before my account is hit. I suspect this is an attempt for the bank to trap people who don't balance their books into spending more money than they have and then hitting them with a fee (pre-opt out thingy with debit law). Link to comment Share on other sites More sharing options...
Chilly Posted October 31, 2010 Share Posted October 31, 2010 Thanks for the info. Blue! With my one account... The charge may stay "pending" for several (3-4 days) before my account is hit. I suspect this is an attempt for the bank to trap people who don't balance their books into spending more money than they have and then hitting them with a fee (pre-opt out thingy with debit law). Is that with both online (PIN-based) and offline (Signature-based) debit transactions? Authorization holds shouldn't happen for online transactions because it's all done by a PIN - there's no authorization and then settling that happens afterwards like offline transactions done via a signature. Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted October 31, 2010 Share Posted October 31, 2010 Is that with both online (PIN-based) and offline (Signature-based) debit transactions? Authorization holds shouldn't happen for online transactions because it's all done by a PIN - there's no authorization and then settling that happens afterwards like offline transactions done via a signature. I am almost positive it is with pin based trans too! I don't do them much... Yet, it isn't like my other account where the trans is instant... Still takes a day or so... Over the weekend, more. Link to comment Share on other sites More sharing options...
Chilly Posted October 31, 2010 Share Posted October 31, 2010 I am almost positive it is with pin based trans too! I don't do them much... Yet, it isn't like my other account where the trans is instant... Still takes a day or so... Over the weekend, more. Weird. I dunno, I've never seen a bank do that. Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted October 31, 2010 Share Posted October 31, 2010 Weird. I dunno, I've never seen a bank do that. What I am gonna do is make a few debit trans with pin and see what happens for sure... Count the days it clears... I will do it during the middle of the week, maybe Monday. Link to comment Share on other sites More sharing options...
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