As competition between banks and products reaches new heights, debit card issuers are becoming more and more creative with their offerings.
The rise of e-commerce has seen a move away from cash and towards cards over the past decade.
While this trend continues to influence how we pay for things, competition in the card market is also leading to some interesting innovations.
Debit cards are now considered an essential, everyday payment option, but that has not stopped issuers from developing new options with more specific uses than a general bank account debit card.
So here we take a look at three of the biggest trends set to affect debit cards both old and new.
Prepaid Travel Cards
The past two years has seen a huge increase in the range of prepaid travel debit card options.
These cards are designed to make international transactions more affordable by offering multiple currency loading options.
Notably in 2013, both Qantas and Virgin Australia released prepaid debit cards with this purpose in mind.
The Qantas Cash global money card and the Velocity Global Wallet are both multi-currency prepaid debit cards that can be preloaded with a number of different currencies and used around the world.
They also double as membership cards for the respective frequent flyer programs, and offer reward points for purchases made on the cards.
While there are other prepaid travel cards that have been around for longer, such as Travelex or even Australia Post’s Cash Passport, the potential points has given the Qantas and Virgin options an edge.
With prepaid debit card use soaring around the world, the chances are good that more travel cards will be available in 2014, as well as more cards offering a way around hefty international transaction fees.
Virtual Debit Cards
Online credit card and debit card fraud has continued to be a significant issue in 2013, and the predictions are that it will remain a serious threat in 2014.
The overwhelming number of card fraud cases online has led to a range of solutions, including virtual debit cards.
Rather than typing in your actual debit card details, a virtual card lets you type in the details of either a temporary card, one-use card, or a prepaid option so that criminals do not have access to all of the money in your bank account.
The Australian-based VCARD, for example, is described as “prepaid, disposable Visa number that you can use for shopping online, over the phone or by mail order anywhere Visa is accepted.”
It is used in exactly the same way as a regular debit card, but protects your money from fraud.
Similarly, the US-based Entropay offers disposable Visa card details with the added option of multiple currencies to allow online shoppers more flexibility with where they buy items online.
Virtual debit cards are already well established overseas, but are only just coming onto the market in Australia, so the next year should see more information and products available to us.
Charity Debit Cards
While charity credit cards have been an option for years, debit card equivalents were non-existent in Australia until recently.
In December 2013, Community First Credit Union launched the first: the McGrath Pink Visa Debit card.
This debit card charges a $2 monthly fee, donating $1 of that money directly to the McGrath Foundation.
Community First Credit Union is already a dedicated supporter of the McGrath Foundation and has raised $152,440 for the Foundation through its McGrath Pink Visa Card initiative launched in 2009.
After noticing a 35% rise in the number of debit card accounts since the start of the GFC in October 2007, the credit union decided to extend the program to give more people an opportunity to support this charity.
“More and more people were telling us that they love our credit card but also want the option of a debit card that enables them to support the McGrath Foundation,” said John Tancevski, Chief Executive Officer of Community First Credit Union.
“Since the GFC, Australians are saving more and paying down their credit card debt. They want to pay for transactions using their own money…But they still want the convenience of plastic.”
While this charity debit card is the first in Australia, 2014 could be the year that sees more of these options available for the community-minded.
Although debit cards will always offer the same basic features, different extras and specific purposes are leading to a wider range of options.
In turn, that should give us more ways to get a better deal on banking and find the best payment option for any situation.