Ann: Quarterly Report (Appendix 4C), page-66

What I don’t understand about Spt is the following. A customer makes a transaction of say $1000. The 1000 is locked on their credit card. Meaning that their available balance is reduced by 1k. I understand that the client doesnt incur any interest charges. But they still have 1k locked up on the card which they cannot use, correct?

The vendor covers the 1k even though the card has the 1k locked, similar to a hotel deposit.

if that is correct what is the incentive for the a. Vendor when they can use apt or zip and not cover the sale and b. The client, when you get the 1k locked and your available balance reduced. I cannot see the incentive for either party compared to the competition.

thanks for any help in regards to this question.