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Visa Electron

Visa Electron is a debit card that's used across most of the world, with the exception of Australia, Canada, Ireland and the United States. These four countries just use the usual Visa Debit card, and indeed the Visa Electron card was introduced in 1985 as a sister card to the Visa Debit card.

The difference between a Visa Electron card and a Visa Debit card is that if a purchase or transaction is made using a Visa Electron card and there are insufficient funds in the cardholder's account to cover the value of the transaction, then the transaction is refused. Visa Debit cards can be used if there are insufficient funds, up to a specific limit. Many offline ATMs and purchase terminals do not accept Visa Electron cards as they lack the functionality to check for the availability of funds in the cardholder's account.

Visa Electron history

Visa began as a company in 1958, as part of Bank of America in Fresno, California. The bank took the unusual move of mailing out its new credit card, called the BankAmericard, to anyone and everyone it thought suitable of owning one, and hoped that enough people would be swayed to use the plastic to pay for purchases. The idea proved initially to be something of a disaster, as although Bank of America had budgeted that 4 percent of the cards would fall into 'the wrong hands' and be used fraudulently, in actuality nearly a quarter of the cards were used by people who had no intention of settling their accounts honourably. In the end, Bank of America confessed that the venture cost them over $20 million, but at least it helped to establish the 'Visa' name. The BankAmericard was renamed 'Visa' in the middle of the 1970s when a handful of other financial institutions came on board to use the credit card services as created by Bank of America.

Visa Electron today

In the UK, Visa Debit cards vastly outnumber Visa Electron cards. Of all the major UK banks, only HBOS still issues the Visa Electron card, and then only to very basic bank accounts where there is no overdraft facility, and accounts designed exclusively for children and teenagers, and people with low incomes or poor credit histories.

Retailers are usually happy to take Visa Electron cards (as payment) as the intercharge fee for a Visa Electron card is much lower than a Visa Debit card or credit card, due to there being no issue of the issuing bank being owed funds as the use of the card took the cardholder into the red. Online merchants also continue to accept Visa Electron cards. To accept Electron cards at a site, there is a yearly fee of €125, and a cost per transaction of between 2.3 and 2.7 percent plus €0.25.

Despite the card's slow demise in the UK, the Visa Electron card remains the 'debit card of choice' in Central and Eastern Europe, the Middle East and Africa. Most people in these areas when opening a bank account for the first time will receive a Visa Electron card for debit transactions and ATM use.

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