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Payment Innovations

Convenience for borrowers, potential cost savings for lenders

Enable debit acceptance for Loan Repayment


Visa’s Loan Repayment Program can improve economics with debit acceptance for repayment of a loan. You can now accept Visa Debit and Prepaid cards to allow cardholders to repay almost all consumer loans including credit cards, auto loan, mortgage and personal loan. By participating in this program, you support customer preference, improve the payment experience and increase process efficiency.

Cardholders want diverse payment options, and studies show consumers prefer debit over ACH or checks by at least 2 to 11. This includes millennials, who are estimated at 80 million, bigger than baby boomers, who are estimated at 77 million2. According to a recent study, millennials are more likely to not have a checkbook2. For those millennials who hold a checking account, they are unlikely to know their routing/transit number, and more than a fifth of all millennials have never written a physical check to pay2. However, the vast majority of banked consumers of all age groups typically carry a debit card3.

Bill pay preference1

According to a 2015 study by Phoenix Bill Pay Choice Insights, among those who pay with check or account deduction, 24% would prefer to pay using debit. Of the 12% surveyed responded who use checks, 27% of them said they used checks to pay bills most often because checks are the only accepted payment method.

Potential benefits of paying with debit include:

Convenience: It is easy to carry so cardholders can pay from virtually anywhere.
Control: It enables cardholders to set up recurring bill payments.
Tracking: It makes it easier for cardholders to manage their budgets.
Flexibility: It gives cardholders another payment option for digital and mobile transactions.

For consumers, it can be an ideal way to repay all kinds of loans. For lenders, it offers an opportunity to go paperless and help drive cost savings and improve customer service.

Research suggests accepting debit can save 34¢ per transaction compared to check5 and can reduce customer call times by 80%4. Whether it is agent-assisted phone, IVR or online, migrating check and ACH payments to debit can save you money across the board.

Contact your AE to find out how Visa is supporting the deployment of debit acceptance for loan repayment with new customizable programs, competitive pricing, research and best practices.

Documents & Publications

Visa U.S. Debt Repayment Incentive Interchange Program Guide

View the infographic: The advantages of offering Visa debit card acceptance for loan repayment

View the infographic: Making the transition to Visa debit card acceptance for Loan Repayment

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Sources:

1Phoenix Bill Pay Choice Insights, 2015 Base: Bill payers who are card active; Average of preferred payment method across electric, gas, oil, water, rent, charity property/life/health insurance and auto loan
2First Data Millennial Study, 2016, https://www.firstdata.com/en_us/all-features/millennials.html
3Visa U.S. Payment Panel Q406-Q307 & 4Q16-3Q17 Base: Card owners
4Navigant Consulting, BlueFlame Consulting, J.D. Power & Associates, Mercator Advisory Group Q3 2016
5Visa Bill Payment Cost Study performed by Treasury Strategies Inc. November 2015