In my experience, it doesn’t matter if you bank with a major bank, a small bank, a credit union, etc., your debit card is accepted everywhere. However, only some places will accept Visa or MasterCard or [insert credit card here].
Why are Debit Cards universal and Credit Cards aren’t?
In: Technology
Credit cards are borrowed money and so credit card companies charge fees to both the borrower and the merchant for their use. Some stores don’t want to accept this fee and so they refuse some or all credit cards. Some stores find the fee to be worth accepting due to the increased business they think they are getting and so they will accept some or all credit cards.
Each credit card company applies their fees differently so stores will often reject cards that have higher fees.
It’s all about fees, not access… its all about the money.
The merchant (the store, etc.) pays a fee to have credit card transactions. Generally this is about 3% for credit cards (but deals vary). Usually debit cards have smaller fees. So, while its uncommon, certain places want to only use debit so they can pay a lower fee then credit cards. The place this is generally seen is small family stores and such that have small margins and don’t wanna deal with the higher fees, like a corner store may do this.
It’s the service agreement. For example Costco only used to accept American Express. Amex made an agreement that if Costco only accepted them, they would charge lower fees. Maybe 1% instead of 3% .
I also know that at my first job (which was a small local place, not a multinational chain like Costco) that Amex fees are significantly higher than others, so they decided not to use them.
Now though, it’s not so much about having fees that are too high as it is about giving discounts to be exclusive.
Why accept debit? Not doing so would be dumb. Not everyone has one of each credit card, or even has a credit card at all. And not everyone who dies have a credit card wants to use it. It would be like not accepting cash.
Debit cards tend to be more versatile in that the request to your bank can be submitted under credit or debit at the vendors discretion. Credit cards have higher operation cost for business and are thus not accepted by companies with high overhead as the credit card companies charge a % of to total transaction price. Debit cards have lower access costs if any for vendors. Summary: it costs vendors more to run credit cards.
If I’m reading the question correctly (why visa and MC are accepted but not Amex or discover etc) it has to do with the fees the card companies charge the retailer to accept their card. Amex is higher and visa and MC are both lower. Not sure about discover etc but I know the fees prevent Amex from being accepted in a lot of places.
Debit cards are direct fund access. No funds means the debit won’t function.
Credit cards are established credit systems based on user responsibility which provides purchase power by delaying access to funds. This allows people with ‘good’ credit to purchase beyond actual fund access limits.
Credit cards cost more for stores to accept and so a lot of stores don’t accept them because they would lose a lot of money
Fees ….card processors (aka merchant services), charge a % fee against a charge transaction that is processed across their payment network infrastructure… thus a merchant that accepts AE or VISA, essentially agrees to pay a processing fee for every sale they process across that proprietary network – $100 charge might result in a 1% fee being paid, meaning that the buyer of the goods pays $100, the seller get $99 and the payment network own gets the $1…. you are paying for near-real time movement of funds..,
for Debit cards, (aka “ check cards”), the payment, although initiated by the debit card at the POS terminal, the actual payment transaction is put through the bank/ clearinghouse/Federal Reserve payment network, which is not real-time processing. So, in a nut shell, the buyer and seller have a choice as to pay for faster service, or to not pay for same
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