If you’re Canadian, you’re probably experiencing a network outage right now.
In: 33
Visa and Mastercard, et al are services that move money from one place to another. They largely do it on a credit system, you swipe your card, the company that owns the machine contacts Visa who approves the transaction, credits the machine which then credits the merchant’s bank, then debits the bank backing the card, be it a credit card (a weird invisible bank) or your actual bank.
In debit, Visa is excluded, the transaction is direct from the machine to your bank and works in a similar fashion.
In the case of Visa, a transaction fee is paid by the merchant, the POS terminal owner (swipey thingy), and your bank, which is ultimately paid by you in the form of higher prices, bank fees, credit card interest, and 1% of your soul.
In debit the Visa fee is avoided which is why debit used to be slightly cheaper in some cases, but the other charges remain. In the US Visa and such are protected from fraud by law, debit is not. If someone steals your bank card and runs it as Visa, it’s protected from fraud if you play your cards right (missing a card? report it now).
In the case of debit, it’s you vs. the bank and they can hold you accountable for fraud committed by others.
__
When I was a pup ATM cards were just that, they could only be used, with a pin, at an ATM. Eventually they could also be used in major merchants, like grocery stores. Later still, they got a Visa/MC logo and could function exactly like a credit card.
Latest Answers