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true or fale:A debit card is a method of payment whereby a third party, for a fee, removes from the collector the risk of non-collection of the account receivable.

User Ho Ho Ho
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1 Answer

4 votes

Final answer:

The statement is false because a debit card directly transfers funds from the cardholder's bank account to the seller, using the cardholder's available money, instead of involving a third-party risk mitigation service for a fee.

Step-by-step explanation:

The statement proposed is false. A debit card is not a third-party risk mitigation tool but a method of payment that allows the cardholder to transfer funds electronically from their bank account to the seller's account when making a purchase. Unlike credit cards, where the credit card company provides a short-term loan to the buyer, a debit card uses funds that are already available in the cardholder's checking or savings account.

When a transaction is made using a debit card, it operates like an electronic check, instructing the cardholder's bank to transfer money directly and immediately from their account to the seller. For instance, if you have a checking account, your bank might issue you a debit card with a Visa or Mastercard logo, allowing you to use it at businesses that accept these cards. It's important to remember that credit cards offer a borrowing facility whereas debit cards reflect the cardholder's own funds.

User Samra
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