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It seems to be a step backwards, that Amtrak will no longer accept debit cards at QuikTrak machines. I wonder why this is?
No Debit Cards at QuikTrak?
- Thread starter openmouthedfool
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It may be related to new Federal Regualtions (Reg E) that will take effect in August that add new restrictions on debit cards and the ability of banks to allow customers to overdraw their accounts with them. Typically card interchange fees are less for debit card transactions and merchants prefer to take them over credit cards that have higher fees. Maybe new regs change that.
caravanman
Engineer
I believe that a credit card is often pre authorised to guarantee to provide the funds to the seller.. A debit card presented just before a train departs might not be backed up by sufficient funds in your bank account.. so no ticket for you, and no money for Amtrak against a seat that should be sold .. I guess that would be the reason.
Ed.
Ed.
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Caravanman is correct. Prior to these new Reg E regulations taking effect the Bank would pay the amount and create an overdraft situation (and charge overdraft fees) to the related checking account. The new regs will severely limit this thereby resulting in the exact situation Caravanman detailed in the above post. More likely the bank would reject the transaction at the Quik Trak if there were insufficient funds in the checking account. Some banks are giving their clients a choice as to whether they want their debit transaction to overdraw their account( and incur fees) or not. Some banks are going to prohibit overdrafts from occurring. I'm in the banking field and this new Reg E is going to have some significant ramifications on merchants and their willingness to accept debit cards. Restaurants will likely be next to stop taking debit cards.
Government regulations sometimes have unintended consequences, however well intentioned or needed. This regulation will drive more people back to credit cards in an environment where getting credit remains difficult.
I'm not quite following the "overdraft" rules explanation. If someone doesn't have enough money in their account, and they try to buy something (be it an Amtrak ticket, a meal at a restaurant, or anything else), won't the bank just decline the transaction? If so, then why would that move companies to stop accepting debit cards? How is that any different from someone trying to go over their credit limit with a credit card, or having any card otherwise declined for various reasons?
Not that it really impacts me, personally. I never use my little plastic card thingy that's connected to a checking account (debit card, check card, ATM card, or, as some folks I know back in Milwaukee are wont to say, "Tyme" card) to make purchases. The only use it gets is when I'm at an ATM, or when I visit a bank (since most banks tend to just have you swipe the card at the teller window rather than filling out any paperwork). Most of my purchases are with credit cards.
Not that it really impacts me, personally. I never use my little plastic card thingy that's connected to a checking account (debit card, check card, ATM card, or, as some folks I know back in Milwaukee are wont to say, "Tyme" card) to make purchases. The only use it gets is when I'm at an ATM, or when I visit a bank (since most banks tend to just have you swipe the card at the teller window rather than filling out any paperwork). Most of my purchases are with credit cards.
Most banks, under current regulations, will "allow" you to overdraw your account using a debit card. They glady charge you around $30.00 per occurance. The new regs will be designed to stop banks from allowing overdrafts and the attendant charges or, in order for it to continue get the clients "express written consent" to overdraw their account. Credit card companies will usually charge an overlimit fee and allow the transaction as well except for the repeat offenders. Debit card transaction, and this is an educated guess, outnumber credit card transactions 50 to 1. The Bank I work for, statistically, 60% of the daily debit card transaction would create an overdraft situation in a persons account.
I understand that part, completely. But, what I don't understand is, what does that have to do with the merchant? Isn't it the bank's responsibility to approve/decline the transaction? The merchant is just swiping the card. If it doesn't go, no sale. If it goes through, then the account has money.
That is an amazing and scary number.
I think that the merchants risk of accepting a debit transaction has gone up and they will begin to look at new policy to protect them which will likely be not to take them. Whereas the merchants could make a reasonable assumption that the bank would pay the transaction based on insufficient funds now the reality is that the banks, as required by Fed regulations, will not be paying those transaction. A convenience store may not take debit cards for gas purchases but will for merchandise purchases. Amtrak may still take debit cards in their diners and cafe cars but not for quik trak ticket purchases.
Sorry if I'm not getting my point across, after a hard day in the office its hard to talk about work so I'm only using a third of my brain. The other 2/3 of my brain is planning my next train trip.
The 60% number, when I heard it, caused my jaw to hit the floor. Scary indeed!!!!
I guess I just don't understand the increased risk to merchants. If a charge would result in an overdraft under the new regs, wouldn't the authorization simply be declined and no purchase take place? If it the bank duly authorized it, wouldn't the bank have to pay the merchant for the authorized transaction in any case? Isn't that what authorization is for? The issue would then be between the bank and the customer, or just the bank itself for an improper authorization, which is their fault and no one else's. So where is the actual exposure for the merchant?
The 60% figure stunned me, too.
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Overdraft protection or not, there is no increased risk for the merchant. Especially with a debit card transaction where you enter your pin #. But even using it as a credit card doesn't change the risk to the merchant. Just like with a regular credit card, contact is made with the bank in question to see if the funds are there. If yes, sale is approved and a hold is placed on that money reducing your available balance. If no, then the sale is declined.
The only difference that overdraft protection brings to the equation is at what point does your bank reject the sale if you don't have enough money in the account.
The only difference that overdraft protection brings to the equation is at what point does your bank reject the sale if you don't have enough money in the account.
People tend to be very confused when a Milwaukeean says he/she needs to use a "Tyme machine" instead of ATM.
Amtrak does have this notice on its web site:
It could just be a misunderstanding, that PIN-based transactions aren't allowed any more, but a MC/Visa debit card will still be accepted as a credit transaction.
I don't think any of the new overdraft regulations have anything to do with it.
The original poster didn't provide many details -- did he try it and it didn't work, or there was a notice saying "no debit card transactions", or what?
It could just be a misunderstanding, that PIN-based transactions aren't allowed any more, but a MC/Visa debit card will still be accepted as a credit transaction.
I don't think any of the new overdraft regulations have anything to do with it.
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amtrakwolverine
Engineer
so lets say a passenger had a ticket paid for him by a friend and all he has is the revvy number. he does not have a cc or dc on him. i could not swipe my dc to activate the machine so he can enter the revvy number and get his ticket printed like i did last year on the way to boston.
Cho Cho Charlie
Engineer
I always use my "bank card", which has a Visa logo on it, as a credit card (no PIN entry) at a merchant. However, the money still gets deducted straight from my checking account. I have never, ever, gotten a separate monthly bill for my "bank card", not even one showing a zero balance due.
So, I am not sure that if I overdrafted my checking account, that I would suddenly get a Visa bill in the mail. I think it would be simply handled the same way if a paper check I wrote, overdrafted my checking account (BIG fees!).
Yea, I have noticed numerous times over the years, that if I press the "Credit" button instead of the "Debit" button, it will still ask me for my PIN. If I ever did actually enter my PIN, it would be processed as a Debit transaction even though I pressed "Credit". I assume that is done exactly because of the difference in merchant fees you mentioned. However, I am subject to fees for using my Bank Card as a debit card (I think if I use it more than 6 times a month?), but there are no fees or usage limits, when using it as a credit card.
BTW, when asked for my PIN, I always look for the redundant "Credit" button or the "Cancel" button, so that it does, indeed, get processed as a Credit transaction.
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Cho Cho Charlie
Engineer
Does that, by chance, have anything to do with the "hold" placed on funds?
If you use "plastic" directly at a gas pump, a "hold" is placed on somewhere between $70 to $80 because the final balance is not known yet (you haven't even started to pump the gas). Basically, assuring that there is at least that much funds available, and also reserves those funds. After you finish pumping, the actual purchase balance is known, and reconciled with the existing "hold".
In contrast, with a merchandise purchase the final balance is known when you use your "plastic".
I believe you are absolutely correct. Same with restaurants. The bank, I'm told adds 20-25% to the initial charge as a tip may be added, Then, after the final is run back through it reconciles to the actual amount.
I was given a gift Visa card some months ago - $50.00. In a restaurant the bill came to $48.00. I was prepared to leave a cash tip and have them use the gift card for the $48.00. It was declined as they wanted to add 20-25% to the $48.00 and there wasn't enough on the card to do that.
But, a few days later I was in a grocery store and the entire $50 was taken off the card with no problem.
caravanman
Engineer
The point I think some of you are missing is that there is a risk to Amtrak income.. If the seat is unsold at the last moment due to insufficient funds on a debit card, then Amtrak will forgo that income and the train will have an empty seat. Especialy these days, when trains are pretty full, they would want to guarentee their seat is actualy sold for sure, not just "sold but no worries if you dont have enough money to pay for it on the day!"
Ed
Ed
Devil's Advocate
⠀⠀⠀
Yes, there are fees and they're even higher than for debit transactions. You're just not paying them directly, they're paid by seller. In return for helping your bank stick it to the seller they offer you a blatant kick-back in the form of airline miles or Amtrak points or whatever. That's why credit cards give you a larger kick-back, because more money was siphoned away from the seller. The fees are real and they're being paid by all of us. Even people who pay with cash or checks are paying more than necessary because most sellers simply raise all prices to match the inflated rates that they need to cover transaction related merchant fees. The only question is who gets the extra 1% to 5% you just forked over. Sometimes it's the seller, sometimes it's the transaction network, sometimes it's the bank, and sometimes you get some of it back as "thanks" for bending over.
That's what the "hold" is for, to ensure the funds are available to the seller.
In general pin-based transactions cost the seller less than credit transactions, so this decision is rather puzzling to me. Nothing in this thread has even begun to explain what Amtrak is hoping to avoid or promote with this change, but I doubt the change originated at Amtrak anyway. It's probably in response to some new fee structure or legal "guidance" from their debit/credit processor.
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Correct, there is no risk to Amtrak. The sale won't go through and no ticket is issued if the person purchasing the ticket doesn't have enough funds in their account. So Amtrak cannot loose anything.
If the sale is processed as a pin based transaction, the money is immediately removed from one's checking account and is unusable for other purchases. If the sale in processed as a credit transaction, then just like a normal credit card a hold is placed on the account for the amount of purchase. That night when the overnight processing is done, the money is removed from one's account and sent to Amtrak. Again, no risk to Amtrak either way.
So I'm not quite sure why the change in policy, except maybe to either be consistant (since you can't use pins online) and/or to save having to buy the keypads.
rrdude
Engineer
So let me get this straight:
If I use by VISA-Branded check card (debit card) as a CC transaction online to buy tickets, then weeks or months later I go to a Quick Track machine to pick up said tickets, are you saying that it won't allow this?
This makes no sense to me, as the funds would have already been withdrawn from my account?
Or, are you saying that I can no longer make my INITIAL purchase of tickets at a Quick Track machine, if I use a VISA-branded check card (debit card) ? IF that is correct, then what the heck good is the VISA affiliation?
If I use by VISA-Branded check card (debit card) as a CC transaction online to buy tickets, then weeks or months later I go to a Quick Track machine to pick up said tickets, are you saying that it won't allow this?
This makes no sense to me, as the funds would have already been withdrawn from my account?
Or, are you saying that I can no longer make my INITIAL purchase of tickets at a Quick Track machine, if I use a VISA-branded check card (debit card) ? IF that is correct, then what the heck good is the VISA affiliation?
If you used a Debit card in any fashion to buy tickets, then you'll have no problems picking up your tickets. They are brought and paid for.
As of right now, you can only use a Debit card to buy tickets in its credit card mode. You can no longer use it in debit card mode, where you enter your pin number instead of signing for the purchase.
As of right now, you can only use a Debit card to buy tickets in its credit card mode. You can no longer use it in debit card mode, where you enter your pin number instead of signing for the purchase.
Hmmm, that is interesting. PIN based debit card transaction cost the merchant less that a credit card transaction. The risk of insufficinet funds is the same with a debit card whether it is a pin based transaction or a credit transaction. It would e interesting to understand why Amtrak has this policy because they are paying more to process the same transaction. Pin based transaction cost less as there is the assumption of less risk of fraud because a pin numer must be entered.
R
rosemary
Guest
i am also confused here, the quickthingy machine is there to disspence hard copies of tickets that have been already been bought and paid for, am i right? so by presenting the debit card arn'nt u just confirming that this is the card that was used to purchace the tickets, not is there sufficiant funds in the account to pay for them, so this should have no effect on what card someone uses, it is to prove that this was the card that was used to buy the tickets in the first place, so why can u not use this type of card any more ????
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rrdude
Engineer
OK, that's what I thought, as usual, thanks Alan.
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