I'm getting charged for whaaaaa!?!?!

MSNBC's Red Tape Chronicles has an entry today that is burning up the blogosphere to the tune of 77 pages of comments when printed as a text document. The discussion is related to fees incurred through Debit Card purchases made with PIN numbers. In other words, these fees result from your keystroking your PIN at checkout in a bricks and mortar store rather than using it as "credit", which simply means you authorize the transaction by signing a piece of paper.

The distinction is related to the interchange fees I wrote about yesterday. Bob Sullivan quotes Gartner's Avivah Litan analyst that:

"a bank will take in perhaps 20 cents from a merchant for a $100 PIN-debit purchase, but $1.48 for a signature debit purchase in the same amount. In general, banks can make up to 50 cents on PIN transactions, with the fee capped. But banks can rake in up to 2 percent of signature-based transactions, a potentially huge haul."

In other words the interchange fees related to the pseudo-credit transaction allow the credit card issuing bank to charge fees to the merchant, who will raise the prices of the goods you're buying. As a result, the bank is making up for lost payments from the merchant by charging you anywhere from $0.25 to $1.00. Either you'll pay the fees in lieu of the merchant, or else you'll shift back to using credit.

Given the frequency with which Debit card users actually use their cards, this is definitely something to be on the lookout for. Mpayy will solve these problems with NO FEES EVER for consumers, and offering CASH BACK and a HIGH-YIELD REWARDS program that can be used as cash anywhere Mpayy is accepted. The ability to will only come when you PAY THIS WAY, and merchants will only let you do if you INSIST ON MPAYY.