Why do you need to choose (or tell the worker) “credit” or “debit” when paying for something by card? Are the two cards built differently?

Question

Why do you need to choose (or tell the worker) “credit” or “debit” when paying for something by card? Are the two cards built differently?

In: Other

Answer 1

In the US, debit cards from banks are often administered by a card processing network (Visa or MasterCard). Selecting “debit” means the payment terminal will act as an ATM and withdraw the money immediately using the bank’s ATM network. Selecting “credit” means the payment terminal will submit the request using the Visa/MasterCard network. Using the Visa/MasterCard network often adds a layer of security but (I think) takes longer for the transaction to clear. So it may sit as “pending” for a day or two. Using the ATM network is a bit riskier (it’s accessing your bank account directly, which is why you need to enter your ATM PIN), but the transaction clears immediately and you have the option of getting cash back.