Hello,
We are considering to discontinue ATM only cards and trying to see if it is a good idea to issue debit cards (MasterCard) that only linked to savings account. Know with my gut feeling that it is not a good idea, as Reg D monitoring and account reclassification due to excess transactions can be a nightmare. However I am looking for any regulations or MasterCard or Visa operating guidelines that do not allow us to issue Savings Debit Cards. Thank you!

I believe it was true at one time a checking account was required on a debit card by Visa and MC both, but talking with our plastics processor we have been told that is no longer the case.

Reg D violations have to be dealt with--But let me put it this way: if you're already allowing POS transactions on your ATM BIN, how are you dealing with Reg D currently?

Some options if you're not already monitoring Reg D--see if your Core or your card processor can monitor it. They may be able to shoot the transaction down if it violates the Reg D limits.

Likewise, you can see if your card processor has a field to define the default account for a particular card's POS transactions. If you don't define a POS default account, the card may not be capable of POS transactions. At least, that has been the case for the three card processors I've worked with over the last decade. We recently stopped issuing ATM cards and issuing Debit cards only. We are handling this using the latter method I outlined--by not defining a default POS account in our card processor's system unless the card accesses a checking account.

For the most part, Reg D only cares about POS when it comes to card transactions. ATM cash withdrawals are not in violation of the Reg.

My only concern about issuing a debit card for a saving account (with no transaction account attached) is the mixed message it can send to the customer. ON the one hand, the bank is promoting the use of the debit card on the basis of convenience, time-saving, etc. On the other hand, the bank has to curb that convenience when it comes to purchases with the card.

Honestly, the only reason we do it is we are a credit union. Everyone needs a Primary Share account and Primary Share accounts are non-transaction accounts... and some people want to be a member, don't want a checking account, but want plastics. (I know, I know)

We're eliminating our ATM BIN to avoid costs and complications with the impending change to EMV... so issuing a Debit on a savings seems to be the only solution to make everyone happy.

Who says you have to make everyone happy?? It is simple. If you want a card, open a checking account.

It really solves everyone's problems.

Thahnk you mlindblom,
Do you mind elaborating on "complications with the impending change to EMV". Are you implying that with EMV implementation there will be something specific that will need to be done to ATM only cards?

Our CU is also looking at discontinuing our ATM Only BIN and moving those members using that card into a Debit Card with no POS Limits assigned (only allowing for ATM usage). It's not a perfect solution, but we do have members who will scream if we give them a card that they can use to make purchases.

Check with MasterCard or Visa to determine whether they will permit such an arrangement.

Hey there,

Sorry if I misspoke, there's not really any additional complication versus a debit card... we just don't want to incur the cost and effort of setting up EMV on that BIN and then reissuing the cards on that BIN so they will have a chip.