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.
Last edited by mlindblom; 01/15/15 11:58 PM.
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Nothing I say should be considered legal advice or the opinion of my employer.