What's wrong with my unbranded debit card?
June 19, 2007 9:47 AM   Subscribe

Why won't some places accept my unbranded debit card?

I have an unbranded debit card because I refuse to pay an extra fee just to have a Visa or Mastercard logo on it.

A few years ago I suddenly found that I couldn't use it to pay at the gas pump anymore; although strangely, I could still use it to pay the cashier inside. I had this problem no matter where I went - Mobil, Sunoco, independent, etc. I also found out by talking to an attendant that I wasn't only one experiencing this problem.

I use my debit card for everything and I never had a problem anywhere else, until last night when I tried to use it at a JC Penney store. The card reader wouldn't take it and and the clerk said that my card had to have either a Visa or Mastercard logo on it.

Can anyone tell me what's going on with my debit card? BTW, I live in New York State if that makes any difference.
posted by 14580 to Work & Money (26 answers total)
Pay extra fees? I have Visa and Mastercards with no annual fee. I wouldn't have one otherwise.
posted by JJ86 at 9:59 AM on June 19, 2007

There's two ways a transaction with a branded (check) card can work. It can be rung up as a charge, and ran through the visa or mastercard network. Or it can be ran through the debit network (your network is on the back of the card). Most gas stations seem to automatically ring it as a charge, though some offer the debit option (this usually means you'll have to enter your pin).

Even if they allow the debit option there's the chance they don't work with the "network" you use (for example mine works on pulse and cirrus).
posted by drezdn at 10:00 AM on June 19, 2007

Change banks... I've never paid any fees to have a Visa check card!
posted by dcjd at 10:01 AM on June 19, 2007

Many retailers use credit card processing services (which allow Visa/MC branded debit cards to go through) and not full STAR/PLUS/etc shared card services units. Sometimes it's because they're offered a deal from the processing service (although in the past debit processing fees have been less than credit processing fees). Really, it just depends on the processing service that's providing the card terminals.
posted by pupdog at 10:02 AM on June 19, 2007

yes Visas come with no fee
posted by matteo at 10:02 AM on June 19, 2007

If my card wasn't also backed by visa, the debit machines I use would have to work with pulse or cirrus (for atms there are usually a list near the machine).

It's actually in the merchants best interests to ring something as a debit transaction and not a credit transaction, because the debit networks charge lower fees.
posted by drezdn at 10:03 AM on June 19, 2007

As for the extra fee, I agree, shop around, my credit unions have always offered Branded Debit cards in place of a regular ATM card, no fee for either...
posted by pupdog at 10:04 AM on June 19, 2007

Check with your bank as they control what type of debit card is issued. And no fees for me. I did have the bank brand but they offered a visa/mc bank card so I took that. Still no fee.
posted by JayRwv at 10:09 AM on June 19, 2007

It's actually in the merchants best interests to ring something as a debit transaction and not a credit transaction, because the debit networks charge lower fees.

That's not completely correct. If the amount charged is lower than ~$20, then the companies are better off with the credit transation, which uses a discount rate (something like 1.59%+.25) versus the flat fee.

When I worked in the merchant accounts business, this was a common question because many times convenience stores would get ripped off.
posted by beaucoupkevin at 10:10 AM on June 19, 2007

I'm afraid I can't offer advice, but if you want to know the causes, I think I can shed some light.

"Visa" or whatever is not just a sticker on the card. Some organization has to answer and process the transaction. Traditionally (and this may or may not be universal), the first so many digits of your account number indicates an organization to route the question "Is this valid?" and route the bill for the charges to.

Think of it like the area code and three digits of your phone number, "(212) 555-****"; some phone company has to be well known enough to have every other telco send a call to a line there. You, tommorrow, could start a phone company, but unless you're important enough to convince the other phone companies that they should send their "(npa) nxx-****" calls to you, then you don't exist in their universe.

So, the causes could be:

- a machine has a white-list of known good prefixes that it can handle, and it doesn't bother trying ones it doesn't know (because checking anything costs money).

- your account prefix is too obscure for the network that the machine is connecting to -- perhaps because of something as childish as a peering disagreement or charges spat. Some kinds of transactions (scanned versus hand-entered, et c.) are just thrown out.
posted by cmiller at 10:15 AM on June 19, 2007

I have noticed that stores who take debit cards are increasingly only using Visa or Mastercard-branded debit cards, instead of the usual debit card networks. However, at gas stations, I've seen the "Pulse" and "Cirrus" network logos at many different stations, including Shell and Chevron.

Also, make sure that you're running the transaction as a "debit" transaction (where you have to enter a PIN number), and not a "credit" one.
posted by muddgirl at 10:42 AM on June 19, 2007

Maybe the OP's concern about "extra fees" has to do with fees sometimes charged at the point of sale by the merchant for credit card transactions? Merchants that accept credit cards aren't technically allowed to do this, but sometimes you find merchants that get around this by offering "discounts" on cash/debit purchases.

At any rate, if I understand the question correctly, it sounds like drezdn and pupdog have it -- the type of card that you use is not irrelevant, and that logo is more than just a logo: it determines which payment processing network is used and whether your merchants can accept your card. The merchants that you frequent are probably using different acquirers than they've used in the past, presumably because switching saved them money somehow.

It really does sound like you'd be better off with a branded check card. In general, you shouldn't incur extra fees (certainly not from your financial institution), it will be accepted just about everywhere (with the exception of some small businesses and some warehouse clubs), and I think that you might have some additional liability and dispute resolution benefits when you use it as a credit card. You'd also always be able to use it as a debit card when it's to your advantage to do so.
posted by cobra libre at 10:45 AM on June 19, 2007

You say your card is "unbranded" but when you flip it over and look at the back, it should have a list, or series of logos, for the ATM networks that it supports. E.g., mine says Cirrus, Novus, and STAR. Near the gas pump or POS PIN-pad device, there should also be some indication as to which network the store is using. If there's no overlap, it's probably not going to work.

We're used to thinking of an "ATM card" as something universal -- you can go and basically stick it in any ATM, and have it work -- but that's not completely true. (And people of a certain age can remember when it wasn't.) Initially, you could only take your bank's ATM card to that bank. Then, various banks linked up to make ATM networks. Those have expanded, and now it's difficult to find a place where you can't use your ATM card. But if your bank sucks, and doesn't subscribe to several of the big networks, it's possible you could find stores where you can't use yours.

It's also possible that some stores are switching from ATM-based EFTPOS systems to Credit-Card-based systems, that use the Visa/MC transaction network instead of the traditional interbank networks.

This is odd to me, because I've been told on good authority that the interbank/EFT networks charge substantially lower fees than the Credit Card networks (which is why some stores will give you benefits/kickbacks for running your check-card transaction as a debit+pinpad transaction rather than a credit-card-ish one), but it would explain it.

Bottom line: sounds like you may have a crappy bank. Switch.
posted by Kadin2048 at 10:53 AM on June 19, 2007

First, you don't have a debit card, you have an ATM card. Debit cards have a Visa or Mastercard logo (theoretically, they could be AmEx branded, but I don't know of any banks doing that). The ability to use them as credit cards is what makes them debit cards. Having only an ATM card, you can only use it with merchants that can process ATM transactions, and then only if they support transactions on whatever networks your bank supports.

Second, yes, your bank is crappy, unless you're getting something for having to pay a fee for your debit card. Before it got bought out, my old bank charged a $10 a year fee to have a debit card, but no fee for an ATM card. However, they were very good in other respects, like low overdraft fees, and no specific overdraft limit.

The purchasing bank has no debit card fee, but charges a fee for overdraft protection (but not for me, as they grandfathered accounts from the old bank in to free overdraft protection). It ends up being a very good deal because their overdraft fee is lower if you end up using it, but the monthly charge would have more than eaten up the savings. I get the best of both worlds. ;)

Anyway, change banks unless you're getting a particularly good deal somehow. Fewer places deal with the ATM networks these days.

As an aside, the reason Amex isn't accepted in as many places as Visa and Mastercard is simply due to the higher fees they charge for processing the transaction. Incidentally, that is also why now that Amex licenses other banks to use their processing network, many banks are moving their reward cards to Amex. They get more, so they can offer more.
posted by wierdo at 11:20 AM on June 19, 2007

Wierdo is completely correct, you do not have a debit card, but merely an ATM card.

Here in Southern California, I have never heard or seen of a bank charging an account holder a fee for having a debit card rather than an ATM card, seriously? I'm pretty confident in saying that offering fee-free debit cards is the default now, and after working at a large bank for 6+ years, I rarely saw customers who preferred the regular ATM card (mostly for the fact that they didn't want to be able to spend so much $$$ at a larger variety of merchants).
posted by Asherah at 11:30 AM on June 19, 2007

Debit cards have a Visa or Mastercard logo

That's not a requirement at all. I have a debit card that has neither logo, just ATM network logos (yes, it's still a debit card). I don't use it, because I also have a check card for the same account (but I don't use that one either).
posted by oaf at 11:45 AM on June 19, 2007

In re: fees, I've had a debit MasterCard [it's not called MasterCHARGE, and I really wish people would quit saying that--sorry, pet peeve] for 7 years now, and I've never ever been charged any fees for using it, no matter if I used it as a credit or debit.

As for why they don't work... some merchants just don't take certain ones. I know the place I work takes some unbranded ones but not others, probably due to weird fees or processing errors... crap like that.
posted by Verdandi at 12:22 PM on June 19, 2007

[it's not called MasterCHARGE, and I really wish people would quit saying that--sorry, pet peeve]

It was called Master Charge prior to 1979.
posted by oaf at 2:15 PM on June 19, 2007

I've been doing things with credit card processing lately and am curious about this. If your card number is 16 digits long and begins with a four it is a type of Visa card, unbranded or otherwise. If it starts with a five then it's a MasterCard.
posted by modofo at 2:51 PM on June 19, 2007

If it starts with a five then it's a MasterCard.

Even if it doesn't have the MasterCard logo anywhere on it?
posted by oaf at 3:21 PM on June 19, 2007

That was a bit of a simplification, but if the OP checks his number against this he can find out what his card is supposed to be.
posted by modofo at 3:33 PM on June 19, 2007

That's not a requirement at all. I have a debit card that has neither logo, just ATM network logos (yes, it's still a debit card). I don't use it, because I also have a check card for the same account (but I don't use that one either).

I'm curious as to which bank issues an ATM card and debit card (AKA "check card") for the same DDA account. Not trying to be argumentative here, but if you have a check card for one account your other card is not a debit card.

Perhaps it a problem with jargon. Yes, you use an ATM card to debit your account for food, gas, and anywhere that uses the networks logoed on the back of your card, but it is not a debit/check card.
posted by Asherah at 3:39 PM on June 19, 2007

Check cards are debit cards, but debit cards are not necessarily check cards. I have another card which has no Visa/MC logo, and is most certainly a debit card, not an ATM card. It works in ATMs, yes, but it's a debit card without a Visa or MC logo.

And as for what institution issued me those cards, it's a medium-sized credit union that told me to toss the older card (no Visa logo) when they gave me the new one. But the old one still works, and I still have it. That's good, because the one with the Visa logo expires in about six weeks.
posted by oaf at 5:13 PM on June 19, 2007

Weirdo is mistaken.

Maestro, for example, is a Mastercard-owned debit-only network and plenty of cards have the Maestro logo on the back but not MC. Maestro and MC use Cirrus to talk to ATMs.

In the Visa world substitute "Delta", "Visa" and "PLUS", in that order.

Any bank card which carries a Delta or Maestro logo on the back is therefore a valid debit card, but cannot necessarily be used on a credit card terminal -- it depends either on the machine or whether the card also has some other logos as well.
posted by genghis at 8:03 PM on June 19, 2007

Oh, Visaland also has Electron cards on the debit card side.
posted by genghis at 8:05 PM on June 19, 2007

genghis, that may be true elsewhere in the world, but here in the US, it's a debit (or check) card if it has a Visa/MC logo on it. If not, it's an ATM card.

That some merchants have machines that will clear transactions over an ATM network is irrelevant.

Whatever Wikipedia says, we call pin-based transactions "ATM," and signature based transactions "debit." The rest of the world may be different. I don't live there, nor do I process transactions there. ;)

oaf, if I might ask, where is it that you can use this "debit" card that does not process the transaction as an ATM withdrawal if they can't use it with the credit networks? How many digits does the card number have, and what is the beginning digit?
posted by wierdo at 9:25 PM on June 20, 2007

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