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While Visa Inc. and MasterCard Worldwide work to bring debit card products to Canada (
Currently, Visa- and MasterCard-branded prepaid cards are signature-based cards. They can be used with a signature at the point of sale, with a PIN to withdraw cash from ATMs and online using the information on the card.
Visa prepaid issuers include Vancouver City Savings Credit Union, while MasterCard prepaid issuers include National Money Mart Co. and Toronto, Ontario-based Mint Technology Corp. In July, Mint issued a cobranded prepaid MasterCard with Canadian Tire Corp.
"To avoid confusion (with Interac cards), we don't call our prepaid Visa cards 'prepaid debit cards,'" says David Chong, Vancouver City Savings director of
prepaid Visa programs.
Prepaid MasterCard and Visa cards are popular with Canadian consumers who want to shop online but do not want to risk their credit card being compromised, Chong says. Interac cards, being PIN-based, cannot be used on the Web.
"A lot of people use our prepaid Visa cards for online purchases," Chong says. "Also, for a person who does not qualify for a credit card, or who is worried about building up debt with credit cards, prepaid is ideal."
While Vancouver City Savings is migrating its Visa credit cards to EMV, it has yet to do so with its prepaid cards. "There wouldn't be a business case for adding EMV to our one-time-only prepaid cards, but it would be worth putting EMV on our reloadable prepaid Visa cards," Chong says.
The credit union's approach to its reloadable prepaid card fees contrasts with the U.S. In the States, the model is to have multiple fees, for example an activation fee,
reloading fee, ATM fee and a per-transaction fee.
"Currently, our consumer reload card product is 'packaged' at a flat fee of C$4.95 per month, regardless of the number of transactions," Chong says.
