How does it all work? Who gets the processing fees from the merchants running the Point of Sale?
The Bitcoin debit cards I've used exchange the Bitcoin at top up into fiat currency.
The cards are, internally, VISA/Mastercard pre-paid cards. You pay fiat money to the merchants, like on any VISA/Mastercard.
Who get the PoS fees? VISA/Mastercard/banks, as usual, I guess.
Does this help scalability? Nope. It's just a facile way to spend Bitcoin in a fiat governed world.
Still, I think that until the lightning network is up, we can prevent a lot of transactions from hitting the blockchain, lowering the cost of transactions for everyone and our own personal cost and time.
I think it helps for now, but will hopefully become a useless way of doing business.
It will reduce the decentralized meanings. Right now we should focus on segwit adoption instead only focusing on the lightning network or other suggestion. Segwit is already shown to improve the transaction cost. Well, it does not solve the scalability issue but it helps the network before the LN arrive.