V equal fees on virtual card

Heritage Building Society and SCX Global are collaborating once more in the pre-paid card space with the introduction of a one-load only PIN-based and virtual "VCard" product.

The "card", for want of a better term for a payments vehicle that otherwise behaves like other Visa payment products, is being distributed online and through Mobil retail outlets.

The VCard can be loaded with between $50 and $1000. It has a nine month expiry date and three digit CVV2 security code which are delivered to the customer via email or SMS.

Fees at first glance appear favourable to the issuer. The initial set up fee is $5.50 as well as a foreign exchange fee on overseas purchases of 3.99 per cent. Telephone support attracts high fees. Any balance remaining upon expiry is forfeited. Heritage also earns conventional Visa debit interchange.

SCX is already the agent for Heritage on a range of niche payment products including Secure Cash Express (for offshore money transfers), Canvas (aimed at a younger market) and Just4.

While Heritage is the first issuer of a virtual card in Australia the platform is open to any Visa affiliate.

One underlying issue though may be fees. Looking at the spread of offshore models one well resourced alternative making an early splash, even if in the post-paid credit card market, is Revolution Money.

Former president of Mastercard, Russell Hogg, has joined with Steve Case, co-founder of AOL, and former US treasury secretary Lawrence Summers to bring to market the PIN based card which charges merchants just 0.5 per cent, a significantly lower merchant fee than in conventional credit cards. Revolution is targeting one million US cards on issue by mid 2008.