Sounds like it works slightly differently to our Direct Debit then. Which is simply a payment direct from your bank to whoever it is you pay. You can set them to go out on specific days for specific amounts.
(I think I've explained that properly.)
We, or at least I, call that automatic withdrawal. We have that too, but this still requires some form of transfer charges. Money is being transferred from one bank to another. Banks do not do this free of charge. I know if I personally tried transferring money to someone in another bank it would cost me as much as $25, depending on what the other bank charges. Businesses, of course, get a bulk rate discount.
The system I was referring to, because I think of debit as the card that looks like a credit card but really just pulls from your checking account, does require a processing company that sells and maintains the little card machines, servers, etc and do so in a way that makes all brands of cards work on one system.
That is how it normally works here, however some companies go through a third party for some reason.
Primary reason is security. Third party systems are fully automated on off-location servers with off-location backups and no physical person sees any information of the customer or the business.
I did an IT internship at
National Processing Company and was amazed at just what goes on behind the scenes whenever you swipe your card. Just looking at credit cards and credit branded debit cards you have four major companies, each with separate systems, different security systems, different finance fees, and all of that is constantly being upgraded to keep it as safe as possible.
Then add in the bank debit/ATM cards which are different for every different bank out there. On top of that cashing checks is a hassle, but you could have a scanner that reads the check and can process it automated (just like a debit) so that you don't have to waste man hours and resources cashing checks every night. Those will also use various systems.
And do we want to get into gift cards?
Sure, Walmart could afford to setup their own systems to handle this, but Joe's Diner can't. Joe's Diner can afford to slowly increase his prices 3% over a couple of years to cover fees to have someone else set the system up.
And that brings up another point. If a company isn't charging you an additional fee, you are still paying for it, but you pay it whether you used the system or not.
And as goes without saying, this is all based purely on my experience in an American company. What they do in any other country is beyond my knowledge.
