A debit card facility is a type of securitisation that is backed by debit card receivables. Debit card receivables are the payments that are made by consumers when they use their debit cards to purchase goods or services.
Debit card facilities are typically structured as revolving credit facilities, which means that borrowers can draw down on the facility as needed and repay it over time. The interest rate on a debit card facility is typically based on the prime rate plus a margin.
Debit card facilities can be a good source of funding for businesses that accept debit cards. However, it is important to note that debit card facilities are also subject to credit risk, as borrowers may default on their payments.
Here are some examples of debit card facilities in securitisation:
- MasterCard issued a debit card facility to a retailer. The facility was structured as a revolving credit facility with an interest rate of prime plus 5%.
- Visa issued a debit card facility to a restaurant chain. The facility was structured as a revolving credit facility with an interest rate of prime plus 7%.