Visa Debit Cards...Almost Useful in Canada

About 6 months ago I opened a bank account at TD Canada Trust. Other members of my family have accounts there. They have amazing hours, and I thought it would make it easier to transfer money between accounts this way.

To my surprise, I was handed a debit card with a Visa logo on it. To my readers in the US, this will not seem strange. In Canada, however, our debit cards haven't been associated with a credit card company...just directly with our banks. TD is one of the first to start issuing these Visa debit cards.

I do a lot of bill payments and shopping online. I immediately started thinking of the benefits this card would provide. I could use my current Visa for business, and this one for personal (or visa versa). I like the idea of having it attached to my bank account, so I can keep my spending in check.

Unfortunately, the magic wore off pretty quickly. Apparently giving you a Visa debit card doesn't mean it's actually going to work as a Visa...at least not in this country. I switched a couple of my monthly subscriptions over to it, which of course worked just fine because they were US-based companies. This lulled me into a false sense of functionality.

I then proceeded to have the next 3 attempted purchases declined. Maybe it's just me, but a declined transaction automatically makes me panic. I never assume it's the banks fault...I'm just convinced that I'm now broke.

A phone call to TD quickly made me realize that I didn't fully understand the system. I'm a fairly quick learner, but plagued by logic. Logic is never the right thing to possess when speaking to a bank's customer service line. So, here's what I was told.

Yes, it's a "Visa" debit card, but that doesn't mean it goes through Visa's regular channels. Punching in the 16 digit number, the expiry date, and the 3 digit security code doesn't mean the same as if you're punching in a true Visa's 16 digit number, etc. The company you're purchasing from has to upgrade their merchant terminals to accept Visa debit for phone or online orders. So, just because they take Visa, doesn't mean they take Visa debit.

The biggest problem here is that they clearly haven't explained this to the vendors. In all of the situations I've had the card not work, the person on the phone was completely unaware of the difference. They were sure my card was maxed because they "knew" that they took Visa debit. Since I'm a bookkeeper, and occasionally long-winded, I usually try to explain the situation in detail. Trying to explain why they were wrong didn't help me out much.

So far the companies that accept Visa debit are completely random. For example, I can pay my Rogers Wireless bill with it...but not Bell Mobility.

I suppose this makes me a banking "early adopter". I had a PayPal MasterCard back when they still had those in Canada. I was (judging by the cashier's reactions to the bright orange debit card) the first person in Lethbridge to have an ING Chequing account. Now it's this.

And, just like people running beta software, I'm a guinea pig for the banks who are trying to iron out all the wrinkles in their new system.

I really can't wait until it works the same as (I think) it does in the US. Just like with PayPal, I'm completely frustrated by the inability to use my money the way I want to. Companies big and small want to get paid...at least I think they still do. Having to jump through so many hoops to give them my money should be a thing of the past.

Is it just me? Are you having better luck with these cards? Please let me know I'm not crazy (at least not because of this).

Bank Tellers - Your Company's Best Friends

Metro Bank launch - tellers

Since I complained about banks last week, I thought I'd say something nice about them this week.

This little tip may surprise you coming from me. I tend to do things electronically, with as little human interaction as possible. To be fair, the world of bookkeeping isn't usually filled with extroverts. 

Get to know your bank teller

Although this tip can apply to personal accounts too, this is especially important for entrepreneurs. As we all know, banks can be frustrating places to deal with. There are always extra fees and seemingly arbitrary rules that slow you down left and right. Having a friend "on the inside" can really help you bust through those barriers. 

Start early

Don't wait until a problem arises and then try to quickly make a friend. Since all people can see through this and tellers = people, this isn't going to work. Do as much of your business banking in person, and be genuinely friendly with everyone who helps you. Based on the lines I wait in, friendliness isn't the norm. 

Stay local

As often as possible, do your business banking in person at your home branch. At least in Canada, your home branch is where the important decisions are handled. It doesn't matter who you know at the branch across town, they're still going to put a hold on that cheque you need today. 

Why bother?

Aside from the fact that being decent is just the right thing to do, there's a lot of banking rules that are left up to the discretion of your home branch. A few examples are:

  1. Cheque holds - Let's say your client gives you a deposit by cheque, and need to turn around and buy product with that money right away. Most banks will hold those funds for a few days, but your home branch can use their discretion to release those funds early.
  2. NSF - In most big banks, when a cheque clears and there aren't enough funds to cover it, it is immediately returned. However, if you get to know your account manager, they will often contact you and give you the opportunity to come in and make a deposit before bouncing the cheque. Don't abuse this generosity.
  3. "Cashback" - Similar to #1, most bank accounts have an optional feature that allows you to immediately withdraw a certain amount of money before they hold the funds. For example, if I have $500 of cashback, and I deposit a cheque for $1000, I can pull out $500 in the moment, and the rest is held until they clear the sender's account. These limits are usually reviewed electronically on a yearly basis, but if a friendly teller sees you running up against those limits regularly, they can increase those limits for you right away.
  4. Daily spending limits - Running a business without cheques (smart) means you're constantly using your debit or credit card. Doing that with a $500 daily Interac limit is tricky. Some banks have strict universal limits. Scotiabank, for example, doesn't go above $1000/day for e-transfers, wheras TD goes up to $3000. However, tellers and account managers can bump that $500 limit up to the banks' maximum when necessary.

Sure, just being nice isn't going to change bank policy. If you're a credit risk, your favourite teller won't double the limit on your Visa. Just remember, be genuine...being nice rarely results in bad things happening to your bank account. And, if there's one thing I am certain of, something will go wrong at the bank. Whether it's a computer glitch or human error, you're going to need help with something in your account. Being a familiar face when you ask for help will go a long way to getting you back on track.