NCR 5945, User Manual, Page: 85 / 92

Appendix A: Commonly Asked Questions
What is a debit?
A DEBIT transaction is one that results in the direct access to a
cardholder's demand deposit account (DDA). The “credit” transaction
is an electronic extension of an unsecured loan and affects the
consumer's “open to buy.”
A DEBIT CARD is issued by a financial institution and permits the
financial institution's clients to access their DDA by presenting their
debit card at Automated Teller Machines (ATM) and Point of Sale
(POS) locations.
What is the difference between "off-line" and "on-line" debit?
There are two main categories of “off-line” and “on-line” at the POS.
The first category is VISA/MasterCard “off-line” debit. The
transaction in this case is operationally similar to a credit card
transaction. An authorization is received from the processor (e.g., the
merchant is guaranteed funds) and the consumer simply signs the
receipt. The transaction is cleared via an automated clearing house
(ACH), instead of the credit card settlement network. A deferred
reduction in the cardholder's DDA takes place. Today in the US these
transactions are subject to an “interchange” fee.
The second category is an “electronic ACH” where a check cashing
card is used instead of physically writing a check. In this case, a
deferred reduction in the cardholder's DDA takes place but the
merchant is NOT guaranteed payment (unlike the previous category of
“off-line” debit) since the transaction can “bounce” like a check!