star/plus/cirrus etc - pure debit-only networks - aren't accepted on a plane
debit cards that are on one of the credit card rails (visa, mastercard, etc) are very common. those work because they're just a normal visa transaction
> those work because they're just a normal visa transaction
I wouldn’t be so sure about that. In some payment situations you’re asked whether you’d like to have the transaction go through as debit or as credit—so those two must be different somewhere. And probably in more than just a bit in a packet, as, for example, paying with debit Visas or MasterCards (normal ones, not Electron resp. Maestro) in the Netherlands (where locals almost universally have credit cards) is something of a crapshoot.
They use largely the same rails/network (for example Mastercard). The only meaningful difference is on how and when funds are reconciled.
Some payment providers ask up front to simplify the flows as it's not totally trivial to determine what sort of card it is, and also because different fees apply - historically some merchants added specific fees to basket etc. (less so nowadays but the UI convention sticks)
> Some payment providers ask up front to simplify the flows as it's not totally trivial to determine what sort of card it is
And because the same card can be both. At least here in Brazil, most bank cards have multiple uses (credit, debit, ATM) in the same card. AFAIK, they're separate applications within the same chip, and the terminal has to select which one to use before starting.
Interesting! Did not know that offhand but just looked it up in the technical docs and this is part of the standard. Interesting to hear how other countries have adopted different approaches.
From memory, online and offline transactions are usually split out by BIN number (first six digits)
The BIN will tell you which bank was the issuer and which class of card you have, like standard or premium, though most readers probably don't take that into account beyond the card scheme and card type associated with the range that the individual BIN is in. Many banks will have multiple BINs for the same card type if they are large.
Credit / online debit / offline debit usually get different ranges. The reader gets a list of the ranges when it updates and they don't change super often. Offline readers can be configured to reject cards with a number in an online only range.
It's usually based on the chip settings. Rules aren't as simple as "always online" or "never offline"; an issuer can e.g. convey that they'd prefer online transactions for certain types of payments, while offline is ok for others, via relatively complex configurations of the code of the chip application.
Before that, there was the service code on the magnetic stripe, which also can convey things like "online only" or "domestic use only".
The BIN is only involved in risk management on the terminal's side: Many of these in-flight terminal accept deferred online transactions, which means that, even though they're completely offline, they take the risk of accepting an online-only card. (For truly offline capable cards, the risk is often with the issuing bank.)
That type of risk management can benefit from knowing what type of card it is, and prepaid cards are often seen as riskier (because customers might intentionally drain them before a flight). Of course, debit and credit cards can also be empty/marked as stolen, but these are marginally harder to get and replace.
Yep you are completely correct; people don't realise how complex the chip is - it has what you'd legitimately recognise as an operating system! It can also be reprogrammed over the wire, if your chip and pin is taking a bit toooo long that might be what's happening.
Your correct on the risk spread. I wasn't confident last night (I'm not totally versed on the terminals) but looked it up. As I understand if you choose to accept offline only payments then you accept the risk of the transaction failing. If it's the issuers choice they own the risk.
> The only meaningful difference is on how and when funds are reconciled.
Nope, even this is identical. These days the difference between a debit/credit card is pretty much aesthetic, from a transaction processing perspective there generally isn’t any actual differences. Differences that people see today are most artificial for the purpose of justifying extra fees, or higher interchange based an entirely arbitrary factor that has zero correlation to any risks that appear in the transaction processing and clearing mechanisms.
Basically the only reason anyone really bothers keeping the difference between credit/debit cards around, is as a technical excuse for discrimination and abusive fees. Notably in the EU nobody cares if a debit or credit card is used, because the EU outlawed all the crazy fees and other bullshit, so now there’s no commercial reason to differentiate between the two 99% of the time.
There are a few differences for sure. All entirely technical in how the money moves or clears. The most obvious point here is debit card moves your money from your account, credit moves the issuers money from their account.
But to your wider point; from a transaction fee point of view you are dead right. Of course a credit card has other attractions; for example it's credit :D but also things like section 75 protection.
> There are a few differences for sure. All entirely technical in how the money moves or clears. The most obvious point here is debit card moves your money from your account, credit moves the issuers money from their account.
From the perspective of the card network and the merchant, there is no difference here. The card network has a contract with the issuer, so all transactions, in all scenarios, are always first paid by the issuer. It’s then the issuers problem to figure out where they get the money from.
It’s entirely possible to perform transactions on debit card that will place the account attached to it in a negative balance, and for the person owning that account to vanish. The card issuer is still on the hook for the money, neither the card network, nor the merchant, care if the issuer recovers the funds or not, they always get paid.
> those work because they're just a normal visa transaction
> I wouldn’t be so sure about that.
I would be very sure about that.
> In some payment situations you’re asked whether you’d like to have the transaction go through as debit or as credit—so those two must be different somewhere
Edit: OK maybe there's different level of trust and some take a leap of faith :) In my experience debit didn't work but it appears that its not the same everywhere.
I don’t see why not, they can be run just like a credit card through the same network.
When a debit card prompts for a PIN, don’t enter it, press submit, and it runs as credit instead of debit, but functionally works the same as far as the card-holder is concerned. It might take slightly longer to settle, and the merchant likely gets charged higher fees, but it works just fine. When I got my first debit card 20+ years ago my bank specifically told me to select credit and using it, instead of using it with the PIN as a debit card.
These days I’ve noticed the systems tend to auto-prompt for the PIN instead of asking credit or debit. But skipping it functionally works the same as pressing credit used to.
This is not the case of debit cards in Europe. Debit cards are tied to bank accounts. Most people only have a debit card or don’t even know what a credit card is (or what the difference is). We just call them “cards”.
You can buy debit (or more accurately prepaid) cards in supermarkets in Europe too (which is a big and relatively diverse place, so just because that is/was not a thing in the countries you're familiar with doesn't mean it didn't exist).
I have no idea how the terminals operate, but I was on a flight two days ago and paid with a debit card. The flight otherwise required devices to be in airplane mode. Though there are flights that offer wifi, so there's a good chance the terminal can communicate with the ground, but they just don't allow anything else.
Yep, but IIRC only if they are credit, not debit. I guess they also have certain special conditions with the processor...
Edit: I've also seen it when paying on the cafe car while on train trips in Spain. Even without any cellphone/internet coverage they'll let you pay, but only with credit.
It’s definitely not that simple. It’s totally random. I have only European debit cards, and I can pay everywhere. The same was true with my cards from other countries. Sometimes only Apple Pay/other NFC based system worked for some reason, which is connected to the same cards, when on the same airline I could pay with my physical cards in any other instances. Sometimes I can pay only with my physical cards. Sometimes one of my card doesn’t work. However, I didn’t have problems with them in the US in the past few years. It was more complicated over there before COVID.
Can’t debit account go negative where you live? It’s definitely possible. Even when you don’t have an account credit, or what it’s called. Of course, this is possible only in strange circumstances, but still, I had a debit account with negative statement once. If I remember well, it was because similarly delayed offline transactions. It probably depends on country and/or bank.
star/plus/cirrus etc - pure debit-only networks - aren't accepted on a plane
debit cards that are on one of the credit card rails (visa, mastercard, etc) are very common. those work because they're just a normal visa transaction