Connectivity between businesses and bank payment platforms is a huge point of pain for both banks and their customers. Large banks have been focused on resolving this with their largest clients (enabling connectivity to SAP, Oracle, etc.), but there hasn't been a big push elsewhere. Hopefully this will benefit smaller banks and smaller businesses as well.
My guess is that when he speaks of 'verification' it's more in the context of underwriting the originator of the transaction for fraud/creditworthiness vs. ensuring the account being debited is valid.
The bank likely won't care if you use your card with a PIN ("PIN debit") or with a signature ("Signature debit"), which you refer to as "processed as credit". Either way, they still know it's your debit card that was used even though PIN and Signature debit transactions arrive at the bank through separate networks, so you'll probably get hosed with the fee unless you're in one of their "premium" accounts.
Community banks and credit unions everywhere are licking their chops at the opportunity to siphon off disgruntled customers.
The fee structure for "credit" purchases is different than that for "debit" purchases. It's in the interest of VISA to have me run the transaction as "credit". Would it surprise you if there was cooperation between BoA and VISA (or any other CC provider) to encourage the use of this? The $5/mo charge just encourages it even further.
You're absolutely right, the structure is different for Signature and PIN debit. Pre-Durbin there was a large gap between Signature and PIN debit interchange income and banks wanted you to use Signature debit for that reason.
With Durbin rules implemented that gap has narrowed and now the bank wants you to use an actual Credit Card vs. a Signature Debit transaction because they will make more interchange income off of it.
>The bank likely won't care if you use your card with a PIN ("PIN debit") or with a signature ("Signature debit"), which you refer to as "processed as credit".
Mine does. They have a $1.50 charge whenever I use my PIN for non-ATM transactions. If I sign, there is no fee. It's been this way for the last 10 years I've had a debit/checking line with them.
I was speaking in terms of charging the $5/month fee. Pre-Durbin amendment there was a much wider gap between PIN and Signature debit revenue which is why the bank encouraged you to use Signature debit by surcharging you for using PIN debit.
Just gave up Reader after using for a couple of years. I found I could get the same benefit following the same people/blogs/publications in Twitter and using Instapaper for stuff I wanted to read later. For me, it's one less thing to keep up with.
Same experience for me. I have a lifetime account and they offered the migration to me for free. Granted, I had nothing but email and a vanilla CMS running so I had simple needs but the migration was very smooth.
Regarding the comment on interchange, while the proposed 12 cent debit interchange cap may be revised upward, it's not likely that Durbin Amendment supporters and the Fed are going sit idly by if banks/card associations either overtly encourage consumers to shift to credit cards or widen the gap between debit and credit interchange rates.
Seems far more possible that if Durbin survives the new incoming congress a reduction in credit interchange will be proposed.
Couldn't agree more about mobile payments being hot in 2011, though.
Mint rolls up activity in transaction accounts too, not just credit cards. So debit card transactions, checks where the user provided the merchant name, and (much less likely) even cash transactions where the user bothered to categorize them are part of the data set.
I agree that merchants where cash is the most popular payment method probably aren't going to fare as well in these rankings.
