Originally Posted by
F357
That is not true. According to American Express themselves, the Serve card they offer is a debit card. It is a card you first load with cash, and then use at retailers where they debit your purchases. That is the definition of a debit card in the english language.
Now, maybe somehow they get away with charging credit card fees for these debit transactions, but it doesn't change the fact that they are "debit". There is no credit involved. (Amex is actually the debtor, not the creditor in this situation)
Honestly it sounds like Amex is opening themselves up to lawsuits with this.
For the purposes of the act, the Durbin Amendment defines a debit card as the following:
‘‘(2) DEBIT CARD.—The term ‘debit card’—
‘‘(A) means any card, or other payment code or device,
issued or approved for use through a payment card network
to debit an asset account (regardless of the purpose for
which the account is established), whether authorization
is based on signature, PIN, or other means;
‘‘(B) includes a general-use prepaid card, as that term
is defined in section 915(a)(2)(A); and
‘‘(C) does not include paper checks.
.
I'm not yet a lawyer (please, someone hire me as an intern; I'll work for free), but the issues with Amex are tricky. First, the Serve cards would almost definitely fall under one of those definitions of debit cards. However, the Federal Reserve Board has interpreted various parts of the Durbin Amendment in differing ways. For example, Discover and Amex are both classified as "three-party" payment systems because they issue their own cards as opposed to the "four-party" payment systems of Visa and MasterCard. This exception allows Amex (and Discover) to charge higher fees despite the fact that they issue what are ostensibly "debit" cards.
http://www.digitaltransactions.net/news/story/3459
Which brings up an interesting issue. Has anyone used a Discover debit card to buy a money order? I know it's definitely possible at a lot of places, but I want to know the actual rate of acceptance. For example, I remember reading a person successfully using a Discover card at Sears/Kmart for bill pay, but I haven't read much else on that.