Do banks make a profit from debit card transactions?

antrobus

jonesMUFCforever wrote: »

Banks make a lot of money lending overnight your account balances and paying you a pittance in return.
So the higher the balance you have the more money they make out of you , never mind their cut of visa transactions.

In the OP's case - yes I know their post was years ago - they have a Tesco account. Tesco pay 3% on their current account. Overnight LIBOR is less than 0.7%. That's what's known as a loss leader.

Never mind the cost that Tesco bears in operating that account.:)

jonesMUFCforever

Thrugelmir wrote: »

At base rate hardly profitable lending on an overnight basis. Cheaper probably not to service the account at all. Provide debit cards, cheque books and mail out statements etc.

Hundreds of millions at a fraction of a percentage point over a year is not to be sneezed at - this has been going on for many years.