Why is there more risk for a business when it accepts checks than debit cards?
A. • Checks are paper and debit cards are plastic.
B. • Debit cards are FDIC insured and checks are not.
C. • There is a limit on the amount for checks, not debit cards.
D. • A debit card is approved electronically while checks are not.
D. • A debit card is approved electronically while checks are not.
Checks have higher risk for businesses because they are paper-based and not approved electronically like debit card transactions. This leaves room for checks to bounce or be fraudulent, causing potential losses for the business. Debit cards, on the other hand, are electronically approved and verified at the point of sale, reducing the risk of fraud or insufficient funds.