Boston Globe: Consumers caught in debit-credit duel

Scott Bernard Nelson reports on the duel going on between retailers and banks regarding acceptance of debit vs. credit cards.

With as much as $3 billion in annual fees at stake, banks and retailers have decided to take their long-simmering debit card fight to consumers. It all boils down to a question more vexing than ''paper or plastic'': Should you press the ''debit'' or the ''credit'' button when you use your check card? Make the wrong choice, and it could cost you as much as 75 cents extra for each transaction. Make the right one and you might be eligible for frequent flier airline miles, store credit, or cash-back bonuses.

At issue is the cost to the merchant for accepting one version of debit card vs. another. Merchants want to shift consumer behavior to the lowest cost (for the merchant) approach: consumer enters PIN. Card issuers, on the other hand, want consumers to use signature as that generates the highest income to them. Unfortunately, it's basically a zero sum game with the consumer in the middle.