Visa Debit includes the added benefits of credit cards, including purchase protection and the accessibility of online payments, while still allowing consumers to pay for purchases directly from their bank account. At first glance, a Visa Debit card issued by an American financial institution will look the same as a Visa Debit card issued by a Canadian financial institution but there are a few key differences to how they each process payments.
How Visa Debit Works in the US
In the US, Visa Debit allows customers to use the same card to make both their credit and debit purchases. The card runs on the same credit network whether the purchase is for Debit or Credit. Because the card operates on the same network whether it’s a debit or credit purchase the cards can be used anywhere you see the Visa symbol at a merchant.
It is the customer’s responsibility to clarify if they would like to make a purchase using credit or debit. A credit purchase uses their available credit card limit while debit will deduct the purchase amount from the available balance in their chequing or savings account. The merchant will then run the card through their payment processing system based on how the customer wants the transaction to be processed.
The customer benefits from purchase protection on all their transactions, and they still earn points for their debit purchases.
How Visa Debit Works in Canada
In Canada, debit and credit cards must be issued as separate payment cards according to the Code of Conduct for the Credit and Debit Card Industry in Canada. This means Visa Debit operates on a separate network than the Interac network, the network used by almost all debit cards in Canada.
Whenever a consumer makes a purchase using swipe or chip and pin technology on their debit card the transaction will be processed as an Interac debit transaction. It is only when a consumer makes an online or phone purchase using the numbers on the front of their card that the card will function as a Visa debit card. These hybrid Canadian debit cards automatically deducts the money from the cardholder’s bank account for all transactions, regardless if the transaction was processed using Visa's or Interac's network. If funds are not available, then the transaction will be declined. The card does not ‘borrow’ money the way a credit card does.
Why Should Your Business Accept Visa Debit?
1.) Give customers choice and convenience
Visa Debit gives customers more choice in how they want to pay for items. By increasing the likelihood that a customer can pay using their preferred method then you’re ensuring your business is not going to miss out on any potential sales.
2.) Easy Payments for Travelers
Visa Debit allows customers from countries where debit cards are common to continue using their cards in countries that do not typically use or accept debit cards. Travelers may not travel with large amounts of cash so by increasing the variety of cards that you accept it will be easier for travelers to shop with you.
3.) Not Everyone has Access to a Credit Card
Not everyone has a credit card. Some people may not be eligible for a credit card because they are under 18, they lack the credit needed to get a card, or they are simply more comfortable with other forms of payment. By accepting Visa Debit, you are making it easier for those without credit cards to access the goods and services they are interested in.
4.) Consumer Protection
Visa Debit comes with Visa’s Zero Liability Policy which gives consumers protection for their purchases that they do not get using the Interac Debit network. Consumers can be confident in using their card knowing that the transactions are protected.