> Some payment providers ask up front to simplify the flows as it's not totally trivial to determine what sort of card it is

And because the same card can be both. At least here in Brazil, most bank cards have multiple uses (credit, debit, ATM) in the same card. AFAIK, they're separate applications within the same chip, and the terminal has to select which one to use before starting.

Interesting! Did not know that offhand but just looked it up in the technical docs and this is part of the standard. Interesting to hear how other countries have adopted different approaches.

From memory, online and offline transactions are usually split out by BIN number (first six digits)

The BIN will tell you which bank was the issuer and which class of card you have, like standard or premium, though most readers probably don't take that into account beyond the card scheme and card type associated with the range that the individual BIN is in. Many banks will have multiple BINs for the same card type if they are large.

Credit / online debit / offline debit usually get different ranges. The reader gets a list of the ranges when it updates and they don't change super often. Offline readers can be configured to reject cards with a number in an online only range.

It's usually based on the chip settings. Rules aren't as simple as "always online" or "never offline"; an issuer can e.g. convey that they'd prefer online transactions for certain types of payments, while offline is ok for others, via relatively complex configurations of the code of the chip application.

Before that, there was the service code on the magnetic stripe, which also can convey things like "online only" or "domestic use only".

The BIN is only involved in risk management on the terminal's side: Many of these in-flight terminal accept deferred online transactions, which means that, even though they're completely offline, they take the risk of accepting an online-only card. (For truly offline capable cards, the risk is often with the issuing bank.)

That type of risk management can benefit from knowing what type of card it is, and prepaid cards are often seen as riskier (because customers might intentionally drain them before a flight). Of course, debit and credit cards can also be empty/marked as stolen, but these are marginally harder to get and replace.

Yep you are completely correct; people don't realise how complex the chip is - it has what you'd legitimately recognise as an operating system! It can also be reprogrammed over the wire, if your chip and pin is taking a bit toooo long that might be what's happening.

Your correct on the risk spread. I wasn't confident last night (I'm not totally versed on the terminals) but looked it up. As I understand if you choose to accept offline only payments then you accept the risk of the transaction failing. If it's the issuers choice they own the risk.

> The only meaningful difference is on how and when funds are reconciled.

Nope, even this is identical. These days the difference between a debit/credit card is pretty much aesthetic, from a transaction processing perspective there generally isn’t any actual differences. Differences that people see today are most artificial for the purpose of justifying extra fees, or higher interchange based an entirely arbitrary factor that has zero correlation to any risks that appear in the transaction processing and clearing mechanisms.

Basically the only reason anyone really bothers keeping the difference between credit/debit cards around, is as a technical excuse for discrimination and abusive fees. Notably in the EU nobody cares if a debit or credit card is used, because the EU outlawed all the crazy fees and other bullshit, so now there’s no commercial reason to differentiate between the two 99% of the time.

There are a few differences for sure. All entirely technical in how the money moves or clears. The most obvious point here is debit card moves your money from your account, credit moves the issuers money from their account.

But to your wider point; from a transaction fee point of view you are dead right. Of course a credit card has other attractions; for example it's credit :D but also things like section 75 protection.

> There are a few differences for sure. All entirely technical in how the money moves or clears. The most obvious point here is debit card moves your money from your account, credit moves the issuers money from their account.

From the perspective of the card network and the merchant, there is no difference here. The card network has a contract with the issuer, so all transactions, in all scenarios, are always first paid by the issuer. It’s then the issuers problem to figure out where they get the money from.

It’s entirely possible to perform transactions on debit card that will place the account attached to it in a negative balance, and for the person owning that account to vanish. The card issuer is still on the hook for the money, neither the card network, nor the merchant, care if the issuer recovers the funds or not, they always get paid.

Yes... That's much the point I was making.

But there is a lot more complexity than, I think, you are glossing over. For example, you also likely have at least one technical services partner in the flows, probably two.

Additionally, money often doesn't move in real time, especially when credit cards are involved. The process is, intentionally, split.

Your point on that is fair, but remember, many credit providers are also not banks, and the money is in a bank account owned by a third party. So, as a trivial example, I can't just assume money coming to me from Bank A is related to transactions from Bank A's cards.

A lot of people don't realise that the main way all of this works is through very large batch files with lists of transactions in moving back and forth between various parties behind the scenes.

(We are on semantic points, though, but I just wanted to clarify the complexity behind the scenes that most people don't see or understand)