Wednesday, September 9, 2009

Debit Cards: Consumer Abuse in the U.S., but Great Elsewhere.

Consumers in the U.S. apparently dislike their bank's "debit cards". Some question why anybody would even have one as they carry fees and are insecure.

However, the rest of the worls is quite different. In Canada debit cards are extremely common, almost everybody has one. They are free to use (for the end user) and carry no charges for the user, they are secure and require a PIN (as safe as a credit-card PIN), and are accepted virtually everywhere. Why carry cash in your wallet?

So what is the difference with the U.S. version of a "debit card"?

The difference apears to be that in Canada the banks joined efforts together to create this networks that would allows all their own provate networks to talk to each other.

From Wikipedia: "Interac Association is a Canadian organization linking enterprises that have proprietary networks so that they may communicate with each other for the purpose of exchanging electronic financial transactions. The Association was founded in 1984 as a cooperative venture between five financial institutions: Royal Bank of Canada, CIBC, Scotiabank, Toronto-Dominion Bank, and Desjardins.

By 2005, there were over 80 member organizations and there were over 600,000 Automated Banking Machines that can be accessed through the Interac network. In Canada, the word Interac is often used as a synonym for debit card."

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