Yes, the rails used should not affect the consumer protections you do or do not receive. If it's a debit card, it's a debit card regardless of if it's processed over a credit network.

Exactly how long the transaction takes to _clear_ your account may vary depending on the semantics of the network and integration used, but processing a debit card over a credit network doesn't mean you get to hold onto your money for any longer than you would otherwise. The auth will put a hold on the funds in your account instantly and you will effectively have that much less money in your account.

The terminology makes this so much harder to distinguish. My bank does have different consumer protections for different cards issued through them (debit cards require you to report fraud within 7 days, credit cards require you to report within 30). I didn't realize that the payment network used was not coupled to these mechanisms.

I wonder if financial marketing understands this? Associating credit with less risk, less requirements, in naming of the networks themselves? Even though settlement can occur on each network

The payment processing space, like basically anything when you look close enough, has a fractal-like complexity to it. And in my opinion the industry as a whole does a pretty poor job of abstracting away that complexity, often leaking it through, such as with the "debit or credit?" question.

But turns out it's pretty difficult to hide the complexity, and many businesses are built around hiding it as a service. It usually involves taking on risks others aren't willing to or having an Apple-like resolve to piss off some customers by deciding what's best for them without asking or, rarely, the power and/or innovation to actually change how things are done.

There are consumer protection laws in place wrt to your liability based upon discovering fraud. It's something like no liability w/i 48 hours, $50 in liability with 1 week, full liability after that. I may be getting the specifics wrong, but the gist is correct.

It sounds like your bank has made the decision to eat the small liability as a customer value add.

One of the reasons why people are often wrong about CC being safer than debit is because many banks will also make you whole the next day after reporting fraud rather than waiting for it to process before returning the funds. They're not legally required to do this, but neither are credit card companies, both are doing it to gain customers.

False. Charging back a debit transaction can be massively more difficult - the network rules are very different between Amex etc and debit. The minimums are the same but as Zelle folks are finding out - payment rails matter in terms of protection

Reg E is Reg E regardless of whether you’re on credit or debit rails, and most other regulations/laws are similar, but feel free to ask an extremely specialized lawyer for the specifics in your state.

The thing that is materially different are brand rules, because Visa/Mastercard/etc are effectively their own legal systems. They can, and do, require issuers to do certainly things vis customers and dispute resolution that go above what the law strictly requires. Those requirements may be more customer-friendly than what the debit network saddled the bank with, as debit networks have less of a brand to protect and less power over issuers.

(Speaking strictly for myself and on the basis of things I have believed for a long time: unless you need cash back, customers should choose credit ~every time.)

Thank you for explaining how brand rules might affect the decision which payment rails to choose. But does this also apply to payment cards that were issued by banks outside the US?

When you transact with a foreign credit/debit card at a POS or ATM in the US, you are also routinely asked if you want to proceed as a credit or debit transaction. I never know what to choose and if it actually makes a difference.

Late answer:

If your foreign card is a Visa or MasterCard you should have to choose credit for your transaction to go through. In this case you still have the same chargeback rights as you would have for a transaction at home, but that might not be any (nb: even if chargebacks aren't a thing in your home country the brand rules on them still apply. Some banks will do one if you ask them nicely.)

If it's a Maestro card you should probably try credit first, but I'm not sure.

If it's a VPay card you're relying on pure luck anyway.

The slightly tricky part is that the brand rules may still apply even if it transaction on debit rails, since the brand is printed on the card and Visa/MC doesn't want to deal with consumer complaints because the merchant routed it to debit rails despite Visa's "zero fraud guarantee" (the primary exception for this is pin debit transactions are excluded since those primarily go through debit networks). The challenge then becomes the issuer needs to take a loss as some of the debit networks don't have the chargeback infrastructure that the larger networks have, but you are often still protected by Visa rules just because the card has Visa printed on it.

Is this mainly because of those brand rules which are consumer friendly?

In the UK at least, afaik the Consumer Credit Act applies to Credit Card purchases.

IANAL etc.

Depends... ... on your geo: in the US credit/debit terms used like that often refer to the network it'll travel over. As others have noted the rails don't impact the consumer protection you receive. Outside the US things credit/debit don't have this overloaded meaning. ... on who's asking: sometimes the retailer wants or has to offer you a choice of networks. Sometimes your multi-app chip card is asking you to choose which app to use.

Being asked whether you want to pay with credit or debit when you are trying to pay with a debit card is one of those culture shock moments every time I visit the USA and I ask myself "how could it not know?"