Jun 07 2005 : Canada’s national debit card scheme, Interac, is enabling its cardholders to use their debit cards for online payments in a bid to gain share of a market that is traditionally restricted to credit cards. Almost two-thirds of Canadian consumers prefer to use a card for daily purchases, with about half favoring debit cards for purchases from USD 25 to USD 75, according to a May 2004 survey by Moneris Solutions, whose systems power the Interac Online initiative. Consumers will be able to pay for Internet purchases via Interac Online by making a direct debit to their bank account.

Retailers using the Interac Online payment solution can accept online debit payments in the same way as at their real-world stores. Early adopters of the solution include The Source by Circuit City and DVDsoon.com, a popular online DVD retailer in Canada. By this fall, Interac expects to sign more retailers to its Online initiative, given the scope for attracting customers who do not have a credit card, or are seeking more convenient online payment options. By 2006 Moneris also expects 50 per cent of current credit and debit card payments in Canada to shift to IP networks.

Merchants that do not offer an online debit payment option eliminate 40 per cent to 50 per cent of sales from their web sites, according to Canada-based online debit payment solutions provider, UseMyBank.com. By accepting online debit card payments however, merchants can increase total sales by up to 20 per cent, while receiving funds instantly and reducing purchase canceling rates. Canada presently has eight major national banks and UseMyBank works with six of these banks to offer its online payment services to 85 per cent of Canadian debit card account holders.

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