No, you had it right.
I'm having a tiff with my tap-to-pay, prepaid card, and credit union all unable to offer me the services they each still advertise.
My tap-to-pay app is linked to a prepaid card. This can be loaded by ACH, debit card, credit card, or cash. All of which worked until this fall.
I noticed my automatic debit loads were failing, and asked my credit union. It took some time, and they initially pointed me to the prepaid card provider. Who claimed it was being declined, despite funds available. I checked, and eventually found that my debit card, from Visa, no longer permitted this 'merchant' to use a transaction code that is described as a 'Visa Money transaction'. The credit union says their hands are tied.
The prepaid provider claims they were forced to recode these transactions as 'Visa Money', by, yes, Visa. Why? No answer but I have a theory:
- Visa Money transactions earn discount and interchange fees like any debit transaction.
- But debiting my account this way does earn the prepaid provider a discount fee when I withdraw the funds from there. (No interchange, so you know who this is)
- However, if I were to load my prepaid card with a credit card, this becomes a cash advance. Which earns a higher interest rate in most cases. and is paid LAST by most banks if I pay off my balance. Actually, since I may never pay off the balance, these cash advances will forever be charging interest at that higher rate. Forever. Unless I do pay the balance to zero. I have to pay off the lower interest rate transactions FIRST before I can pay off the higher rate ones. Sharp practice.
- So I cannot any more load from my debit card. Visa rejects the 'Visa Money' transaction for my debit card.
Well, my prepaid provider is unwilling to change anything of this, my credit union is unwilling, possibly unable to, and I'm stubborn enough to cling to the prepaid despite the inconvenience of cash loads.
ACH, you say?
ACH takes 5 days to clear. It just does. This is mostly my prepaid provider's fault, I know, from research. No apologies. It just does. They use the float.
Now, how does all this actually work out good for me?
- I get promotional rebates for using tap-to-pay, which will expire. Then I will reassess the situation.
- I also get promotional rebates from the prepaid card, those also will expire.
- I get fees waived on the prepaid card, which I do not expect to expire any time soon. Free so far.
- And cash loads are fee-free for now also.
But the fees make the systems work. So fees it is. All the way down.
Those of you who pay attention to the payments industry know the names of all the entities I;'d rather not expose explicitly. There are similar problems for every other, EVERY OTHER, institution. Fees drive the industry, and revenue is necessary to keep the servers on to do all this. I get it.
But it's cheap to advertise you can, and then you won't. And to hide behind disclaimers and contractual language that clearly serves you, not your customers. that is the game, and I know it.