In a move aimed in part at accommodating digital-only financial institutions, Visa Inc. on Saturday opened its ReadyLink prepaid top-up network for the first time to debit cards. “The expansion makes Visa ReadyLink available to all consumer and business debit cards. The service is optional and issuers need to opt-in,” notes a spokesman for the network.
ReadyLink is Visa’s prepaid card load network for the U.S. market. It offers cash top-ups at more than 60,000 merchant locations. The addition of debit cards represents a rule change for the network.
The ReadyLink network includes a number of major retail chains, among them Safeway, Randalls, Vons, Walmart, and 7-Eleven. Cardholders must have a card with the ReadyLink symbol on the back to use the service at a participating merchant or kiosk.
With the expansion, Visa says it hopes to add to the convenience of its debit card holders, citing cases where additional trips to the bank aren’t convenient. It also sees the move aiding financial institutions that have emerged in recent years to serve customers in the online channel exclusively. “It … benefits programs like Chime that are branchless, as their accountholders have a new channel to add funds,” the spokesperson says.
Based in San Francisco, 8-year-old Chime Financial Inc. offers app-based financial services such as checking, savings, and a debit card. It is one of a number of so-called challenger or Web-only banks to have emerged in recent years.
Observers say Visa’s move in part could represent a recognition of the growing importance of digital-only banks and their customers. “Fintechs offering banking services, including the neo and challenger banks, now offer checking accounts to [their] customers instead of or in addition to prepaid cards, so Visa’s announcement about ReadyLink to also accommodate checking accounts is being responsive to the shifting market need,” notes Sarah Grotta, director of the debit and alternative products advisory service at Mercator Advisory Group, a Marlborough, Mass.-based consultancy, in an email message.
Some experts in prepaid services see potential for the expansion to apply ultimately to a broad base of financial institutions. “While this is only … open to a limited number of companies, it could offer a way for traditional banks to expand their own digital bank offerings,” says Ben Jackson, chief operating officer at the Innovative Payments Association and author of the “Payments 3.0” column for Digital Transactions magazine, in an email message. “It will be interesting to see whether or not brick-and-mortar banks look to adopt this as a way of offering more convenience to customers .”
Jackson also underscores Visa’s move to include debit cards in ReadyLink’s top-up service as a response to consumer demand. “Despite the pandemic and the continuing growth of electronic payments, it seems cash is still important to even the most digital savvy of consumers,” he says. “If this was requested by the fintechs, we all may need to rethink our assumptions about the customer base for these products.”
Visa’s global reload network outside the United States will continue to work only with prepaid products, the network says. Also, not all Visa reloadable prepaid cards are eligible for the service in the U.S. market, Visa says.