Canadian PIN Debit Holders Set to Start Using NYCE POS in the U.S.

An arrangement hammered out last spring between Toronto-based Acxsys Corp. and the NYCE electronic funds network, Montvale, N.J., to allow Canadians holding Interac cards to use their cards at all NYCE-linked merchants in the U.S. will switch on next month. The program, dubbed “Cross Border Debit,” is the first extension of the Interac network, Canada's bank-owned national EFT system, to retail outlets outside of Canada. It is expected to benefit millions of retirees, business travelers, and vacationers who travel to the U.S., many of whom have second homes in the southern and southwestern U.S. and flock to them in the winter. “Debit is very popular in Canada, and Canadians don't have access to debit in the U.S.,” says Bob Grant, senior vice president of electronic banking at Scotiabank, one of five primary financial institutions participating in Interac, for which Acxsys is the operating company. Of the five, he says, three have so far signed on to the agreement with NYCE for U.S. access, including his own bank as well as Bank of Montreal and TD Canada Trust. These three control 75% of the debit card base in Canada. Canada's other two major financial institutions are CIBC and Royal Bank of Canada. Grant, who says the banks participating in the program have built a separate switch to receive Interac volume from the NYCE switch, would not reveal other details of the networking arrangement with NYCE, including switch fees or other pricing. Nor could he project transaction volume from the program. Although the number of Canadians traveling to and staying in the U.S. annually may represent a small number of the overall base of debit card users in the U.S., Canadians are avid users of debit cards tied to personal identification numbers. Canadians perform 2.6 billion PIN debit transactions adding up to $116 billion (Canadian) annually, which accounts for 16% of the dollar-volume of all payments, including cash and checks, in Canada. Indeed, Canadians perform 72 PIN debit transactions per person every year, compared to 44 in the U.S. There will also be a substantial base of NYCE-branded point-of-sale terminals awaiting them in the U.S. NYCE, a subsidiary of Milwaukee-based Metavante Corp., claims to network more than 950,000 retail locations. All Canadian debit cards are PIN-based cards; the so-called signature-based type of debit card is not issued in Canada.