With Pulse Deal, Interac Expands Its Cross-Border Utility

Canada's Interac Association PIN-debit network this week announced a deal with the Houston-based Pulse network that will let holders of Pulse, Discover, and Diners Club cards withdraw cash at Canadian ATMs. More such deals with other networks are likely as Interac seeks to let foreigners use their cards while visiting Canada. Pulse is the big electronic funds transfer network owned by Riverwoods, Ill.-based Discover Financial Services, which also owns the Diners Club International travel-and-entertainment card. Allen Wright, Interac's vice president of product strategy, would not identify other networks Interac may be talking with, but he hints that talks similar to those that produced the Pulse agreement are or will be under way, and that they may not be confined to U.S.-based networks. “It builds on our intent to expand internationally,” he tells Digital Transactions News. The pact with Pulse covers only ATMs, or automated banking machines (ABMs) as they're called in Canada. Under it, Interac recruits ABM acquirers to accept Pulse and its affiliated cards. The Pulse-Interac connection eliminates network setup and ongoing costs for Canadian acquirers, Interac says. U.S. Diners Club cards received Canadian ATM utility in July; Pulse and Discover cards will get access in October. While the pact does not provide for point-of-sale PIN-debit purchases, Wright says without giving details that “it's fully contemplated” that POS functionality might become part of cross-border network pacts. Interac affiliate Acxsys Corp. struck a deal with the NYCE EFT network in 2004 that lets Canadian debit cardholders make PIN-debit purchases at NYCE-accepting merchants in the U.S. The only acquirer participating in Interac's cross-border ATM program today is Open Solutions Canada, operator of a retail, or “white-label,” network of about 8,000 ATMs. But Wright says Interac is talking with more acquirers, both of the white-label and bank variety. “We are encouraging adoption of this acceptance by all the ABM providers in the country,” he says. “Clearly, that's our strategy.” He adds that “there is keen interest” by Canadian financial institutions. Canada has 57,864 ATMs, Interac reports. Pricing will be up to ATM owners. On the consumer end, the typical surcharge when a Canadian uses an ATM not owned by his or her financial institution is C$1.50. Pulse, one of the major remaining U.S. EFT networks, and its parent company Discover have a goal similar to Interac's. “Increasing acceptance around the world is a key priority for Discover Financial Services and this agreement supports that goal,” Pulse president David Schneider said in a statement. But the urgency of international utility is likely greater for Interac than for Discover. Interac has had a near monopoly on Canadian debit for years, but is seeking new growth avenues as Canada's banks contemplate issuing Visa- and MasterCard-branded debit cards (Digital Transactions News, Sept. 4, 2008).