Saturday, October 08, 2011

"When a consumer pays with a debit card instead...

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"When a consumer pays with a debit card instead of a check, the bank saves money. In the 1980s, Visa calculated the savings at 55 cents to $1.60 per check. The savings is much higher today. For decades, Bank of America, the founding owner and member of Visa (originally called BankAmericard) and all of the Visa and MasterCard banks, including Chase, hid the identity of their debit cards from stores by designing them to look and function like their signature authorized credit cards and by charging stores the same price for debit and credit transactions. Banks did this despite the fact that purchases made with a debit card didn't involve a loan from the bank, posed very little fraud risk and were extravagantly profitable to banks because they eliminated the costs of processing and clearing checks."

So, on top of the money saved by not processing paper checks, banks have been charging stores 44 cents per transaction allowing them to make profit on top of savings. The transactions cost about 4 cents each, the savings per transaction is, at least, dollars per transaction. Even though they're allowed to charge from 21 to 24 cents for a 4 cent transaction they're screaming and scheming ways to rob account holders to replace the money they've been robbing from retailers.

Fees like B of A's affect interstate commerce and therefore fall under federal regulation, if the regulators are courageous enough, and their budgets aren't cut to prevent them from doing their jobs.
Debit Card Fees Are Robbery
Banks that charge customers to use debit cards are trying to rationalize one of the largest illegal transfers of wealth from consumers to banks in American history.
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con·cept: "When a consumer pays with a debit card instead...