Dan -- In cases where the merchant does not receive the payment immediately, I believe that the payment would be deposited into a "settlement account" at a bank. Effectively this is like a checking account. The banks, then through a "clearing house" (which could be an entity like Visa) "net settle" with each other. That is, all the claims on each other are netted out and each either writes a check drawn on the settlement account or receives a check to be deposited into the settlement account. Concurrent with this process each receives an electronic file with the individual transactions to be posted either to credit card accounts or to merchant accounts. The opposing accounting entry to the customer or merchant entry would be to the settlement account. So, as you surmise it should all cancel out with zero in the settlement account except for the float. The float is interest free money to the bank.
Peter -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Dan Scanlan Sent: Friday, September 26, 2008 5:51 PM To: Progressive Economics Subject: Re: [Pen-l] Chase Manhattan late fee On Sep 26, 2008, at 1:46 PM, ravi wrote: > On Sep 26, 2008, at 4:30 PM, Louis Proyect wrote: >> more and more credit cards impose stiff penalties I use a card that can be either a credit card or debit card. The end result (a withdrawal from my account) is the same. I've noticed that when I use it either way, it shows up on my on-line access damn near immediately -- if I head straight home and look it up, it's already there. However, when I pay a bill on-line it takes a few days to show up. I've always wondered if the merchant got his money as fast as it was removed from my account when I pay at a checkstand. Any one know? My guess is that banks use the float to their advantage and that it is a major source of their income. WaMu's collapse yesterday was preceded by billions of withdrawals on- line from normal depositors. My brother, a banker kind of guy, tells me that if WaMu hadn't been purchased the drain on FDIC would have bankrupted it. I wonder if the guv'mint's bailout ultimate goal is to give "credence" (an analog to "credit"), i.e., value, to "assets" that don't really exist except on ledgers. The bailout effectively transfers the notion of reality (real people doing real work earning real wages on which they are taxed) to fantasy (collections of collections of possible collections of probable assets). The real working people pay, the bums on the plush win. Big time. Dan _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
