In message , at 16:18:00 on Tue, 20 Mar
2012, Stephen Sprunk remarked:
Debit cards

These are only issued when linked to a bank or building society account,
usually a current account. As under-18s do not have the capacity to
enter into a contract, banks and building societies do not usually
permit this age group to have an overdraft. Some debit cards, such as
Solo or Visa Electron, require all transactions to be authorised against
money already in the account, which prevents the cardholder going
overdrawn.

How does the merchant know that any given card presented requires
authorization? Is this the floor that folks have mentioned recently
elsewhere in the thread, and is such encoded on the card itself?

For US cards, AFAIK there is no floor encoded on the card; the floor is
set by the card processor depending on the merchant's chargeback
rate--and never exceeds USD 50. The merchant is guaranteed to get at
least that much without having to authorize each transaction--even if
the issuing bank declines it. They will typically authorize any
transaction over that amount, though, which wouldn't work for totally
offline terminals.

I believe it's the same in the UK (although my impression is that some
merchant floor limits are well above the equivalent of $50).
--
Roland Perry