OT: Credit card policies (was Re: Dear Linkedin,)

Sun Jun 10 19:01:46 UTC 2012

> From nanog-bounces+bonomi=mail.r-bonomi.com at nanog.org  Sun Jun 10 13:34:06 2012
> Date: Sun, 10 Jun 2012 14:33:03 -0400 (EDT)
> From: Jay Ashworth <jra at baylink.com>
> To: NANOG <nanog at nanog.org>
> Subject: OT: Credit card policies (was Re: Dear Linkedin,)
>
> ----- Original Message -----
> > From: "Michael Thomas" <mike at mtcc.com>
>
> > On 06/10/2012 11:22 AM, John T. Yocum wrote:
> > > A merchant can offer a cash discount.
> > 
> > I believe that the law just recently changed on that account. I
> > believe that what Barry says was the old reality.
>
> Perhaps, but Cash/Credit for gas dates back to before I moved to Florida in 
> 1981.  Even Further Off-Topic, isn't "debit" supposed to be "cash"?  Why do 
> I pay the Credit price for it?

It is, and *ISN'T*, 'cash'.

Unlike cash (and like a credit card), it is simply an instruction to a third
party to pay the retailer a specified amount.  And as such, is subject to
the terms of the contract between -those- parties as to how payment is made
an what charges are imposed.

Unlike a credit card, the money _is_ immediately dedecuted from your bank 
account.

Like a credit card, it is the third-party clearinghouse that gets the mone
from you, and passes it on to the retailer.  AFTER extracting their charges
for the service they provide.

You pay the 'credit' price, because the card issuer, and the clearinghouse
operations _charge_ the merchant the same amount for those transactions as
for 'credit' ones.  Thus the merchant does not receive any of the benefits
of a 'cash' transaction, so there is no 'discount' to pass on to the buyer.

At one point, VISA, charged -more- for debit transactions than credit ones.
Despite the fact that there was -zero- risk to them on the debit transaction.
VISA got sued over the matter, since (at that time) it was impossible to tell
whether the card number presented was debit or credit.  Thus the merchant
could not determine, in advance, what their 'cost' for the transaction was.
As a result of the lawsuit, the cost differential between credit and debit
transactions was eliminated.