Debit or Credit Card Interchange Fees

If you buy anything you often ask yourself is it debit or credit transaction.The real difference is how your purchase is processed.what fees are admitted on the purchase,who are paying it and what fee are with bound with it.

when you use your credit card sometimes you choose how your purchase is processed either online or offline.If its online than you will be probably needing to enter your PIN Number for the purchase.This way is quick.and it will take no time.Other way is that you sign a slip this is offline transaction and need some time while its been confirmed.

If your credit card has a VISA logo on it than it is running on a visa network.

The difference between online and offline transaction is that when you do a offline purchase by simply signing a slip the retailers have to pay 2% of the fee this is called interchange fee which goes to the bank which issued your debit or visa card.

Online transaction the retailers have to pay lot less 10 cents per transaction which goes to the bank who issued your credit or debit card.

Debit Card Fee Still too High - Fed Sued

A lawsuit has beed filed in the state that the federal reserve has failed to
implement a rule regarding retailers fee charges of banks when consumer pay
by debit card.
A new rule has been acted that 21 cents (or more) will be charged when the
consumer pay by credit card.Nor banks neither merchants are happy with this
new rule.

"When they (the Fed's) issued their final rule, they completely bent to the
arguments of the banks to such an extent that they pretty much ignored the
law," says Mallory Duncan, senior vice president and general counsel for the
NRF.

Accoroding to the lawsuit the debit card transcation cost banks 4 cents
average which makes more than a billion a year.
Banking groups say that the lawsuit is "disgraceful".

After the consumer backlash Bank of America , Wells fargo dropped the plans
fee.