Lootman wrote:Laughton wrote:The retailer pays a small amount to the bank each time they accept a debit card payment. Just the same as for credit cards really but charge may be different. I think, but am not certain, that debit transactions incur a set amount whereas credit card transactions incur a charge of a percentage of the amount being paid.
Debit cards also discourage the use of cash, which is expensive for banks to handle. The government also wants people to use less cash.
I only use my debit cards to get cash out of cashpoints or bank branches. All purchases are on credit cards or in cash.
Thanks for the info, guys.
So, to summarise, the banks make money because, as with all accounts, the money is theirs to use.
They make money because they spend less time handling cash.
Then they make money from the retailer being charged for accepting the debit card.
I imagine the charges may have been a lot more years ago. I vaguely remember my dad back in the 70s paying with cash and haggling a better price.
Out of interest, Lootman, why do you prefer using a credit card rather than a debit card? I tend to use both cash and debit cards and I feel safer that way. Both my sister and I had bad experiences with how easy it is to run up debts with CCs when we were young and ever since then, I use them only for large, occasional purchases and pay off the balance almost immediately. I have an intense dislike of knowing that I owe money, as opposed to my wife who doesn't seem to give a monkey's!
Steve