ACH transactions

Tommy Trussell tommy.trussell at
Sun Aug 2 08:43:12 BST 2009

On Fri, Jul 31, 2009 at 1:05 PM, Graham Todd<grahamtodd2 at> wrote:
> On Fri, 31 Jul 2009 07:03:56 -0500
> Tommy Trussell <tommy.trussell at> wrote:
>> Actually it is the other way around -- the new system preserves
>> people's dignity. Many people already pay for food using credit and
>> debit cards. SO people on a government food program swiping their card
>> through the card reader look no different from the people who are
>> swiping their bank card through the card reader. When they used to
>> handle paper "food stamps" it was painfully obvious because the scrip
>> looks quite different from standard currency.
> [snipped]
> Interesting that the government does this in the USA.  In the UK the
> money is deposited by electronic transfer into the recipient's bank
> account, and if the recipient does not have one, the government ensures
> he or she gets one. That way they are free to spend their money as they
> please, and they use the same kind of debit cards as those not on
> benefit use.
> Debit cards are very widely used here, and credit cards less so.
> Virtually anybody that opens a bank account receives a debit card, but
> credit cards are issued only after an application is made and a more
> rigorous credit check is made.
> Is the system of issuing debit cards different here in the UK than in
> the States?

It sounds like there are some fundamental differences from what you
describe. The programs we used to call "Food Stamps" in the US -- are
a VERY restricted welfare benefit. Not only can the funds only be used
for essentials (instead of alcohol or tobacco or typing paper, for
example), but there are also classes of FOOD items not allowed, such
as prepared food eaten in the store or pet food, for two examples.

I am not prepared to discuss the historical reasons for such
differences -- suffice it to say there is obviously a very basic
philosophical difference between the US and UK benefits.

If you were also wanting more clarification of the differences between
Debit and Credit cards, I mentioned one major difference in a previous
post -- in the US (at present) Debit card users have fewer legal
financial protections than Credit card users enjoy. However, both
types of cards may have additional "perks" offered by the bank, such
as airline miles or extended warranties, to encourage customers to use
them more.

One additional difference is in who pays. Generally, the CUSTOMER pays
a fee for each Debit card transaction, while the VENDOR pays a fee for
each Credit card transaction. Some major stores, such as Wal*Mart,
encourage customers to enter a PIN at their POS (point of sale)
terminals so they might have a chance to earn more profit on each
transaction by processing it as a Debit. (And unfortunately if a Debit
transaction applies to a Credit card, the transaction tends to count
as a cash advance. So in that case the customer pays a transaction fee
AND the transaction begins accruing interest immediately, instead of
the grace period typically given to Credit card customers.)

I believe US legislation will soon force attendant-less gasoline pumps
(and other POS  terminals?) to require Credit OR Debit purchasers to
enter a PIN. This is to reduce the use of stolen credit cards. At that
point I predict more people will use bank Debit cards vs. Credit cards
when they become equally (in)convenient. HOWEVER I'm not sure who will
be paying the credit or debit fees then....

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