On every card-processing machine used at the checkout, there are THOSE three buttons labelled with “cheque”, “savings” and “credit”. What does each one do with your money?

These buttons indicate the different accounts that can be included on a debit card and give you a chance to choose which account you pay with.

A very basic guide to these buttons (when you have multiple accounts linked to a card) is outlined below:

1. Cheque – The money deducted for the payment would come out of your chequing account, or perhaps an everyday transaction account if you did not have a specific cheque account. This can also be a secondary transaction (like your joint account with your partner or loved one) if you’ve set it up with your bank.
2. Savings – The purchase would be charged to your savings account, or your everyday transaction account if you did not have your savings linked to the debit card.
3. Credit – Payment would come from a credit account or processed on the “credit” rails – Visa or Mastercard. In some cases, pressing credit on a debit card could also access any overdraft service you have available, so it is worth checking the features of your debit card to see whether you have access to this type of service.

The only condition for the above is that your card would have to be linked to these accounts for it to work.

What If You Just Have One Debit Card Account?

When you have a debit card that’s linked to only one account you can usually press any of these three buttons to make a payment. That’s if your not using Tap-n-go!

The main difference then is how a payment is processed – for cheque or savings, it goes through the EFTPOS system, and for credit it goes through the Visa or MasterCard scheme system.

The only noticeable variation in features between these two processing systems for customers is that with the Visa and MasterCard scheme, you could gain access to “Chargeback” protection that makes it easier to get your money back if a retailer or manufacturer overcharges you or goes out of business before providing products and services.

What goes on behind-the-scenes?

But the difference between EFTPOS and the Visa and MasterCard scheme is much more significant for banks and retailers.

Choosing the cheque or savings option actually costs merchants less to process than choosing credit because your bank pays for the former with the merchant’s bank pays for the latter.

This is why you may sometimes see signs notifying customers of a minimum purchase or surcharge for credit card transactions, but not for debit cards.

While most people tend to stick to pressing just one button when they make a payment at the checkout, it is worth considering the other two options you have available.

In some cases it could give you access to chargeback services and other security, while in other situations it could mean avoiding a surcharge for your purchase. And no matter what the case may be, knowing the difference between cheque, savings and credit – and the reasons for these three buttons – means you can make more informed decisions whenever you use your card.

What about contactless payments

When it comes to tapping your card (or phone), this will generally be processed by the “credit” part of the point of sale terminal. This is why you’ll probably be seeing lots of “pending” transactions and a discrepancy between your balance and available funds. If you have an “EFTPOS” card with a chip in it, this will go through the “savings” part and will be debited from your account in real time.