When I use my debit card does cash actually get transfered to the sellers account and how?

My friend and I had a discussion on transactions clearing banks using a debit card as an example. His claim was that transactions are instantaneous and that it is all a paper or electonic transaction; no CASH is actually transferred. My argument was that the time may vary, usually about 72 hours. For example, assuming we use different banks; if he used his debit card to purchase from me, it only verifies funds are available to me, the receiver, and that it posts a transaction to his account, freezing the amount pending receipt of that amount deposited to my account. Therefore, in order for my bank to hand me $15 in cash, it must have received $15 in cash to offset it.

When I use my debit card does cash actually get transfered to the sellers account and how?
First be aware that Debit Cards and Check Cards are often interchanged in such discussions. Next, know that times vary from various institutions.





Personally, the bank I work with 'brings in' debit transactions every morning. So when a member used their card to make a purchase, the account is "Pinged" to verify it's existence, and availability of funds. However there is no freeze or transfer until later. Usually 24 hours or so, though sometimes longer.





There is a case I'm familar with though while working at a hotel, where if a guest paid w/a Debit Card, +20% of the bill would be 'frozen' until payment cleared. Not sure why, but it was the stated policy of the hotel.

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