With eWallets becoming increasingly popular, leading to the growth of massive companies such as PayPal, small regional companies have also found their niche. One popular example is Canada’s Instadebit.

Instadebit basically works as a medium through which you pay online merchants. Instadebit takes money straight from your bank account, but does not provide those details to the merchant. It’s pretty straightforward, right from the get-go.

When you create your Instadebit account, you simply input your banking details. Instadebit then deposits a small amount into your account, and once you've seen it on your statement you can verify your details. Its popularity is ever increasing due to how comfortable it is to use, really. Once you've registered, you can pay online merchants with ease, all using the same details.

Does it work for merchants?

Instadebit claims to be a good choice for merchants for the following reasons among others:

1. potential customers will have an easier way of buying from them
2. they will get access to a large pool of potential clients
3. Instadebit provides security against fraud

While there are no particularly unique features for merchants, having the option allows access to more customers, making it worthwhile. Most especially as an online merchant which is not a household (where people might be scared to input their credit card detail).

Why isn’t there a US equivalent?

Canada has Instadebit, among others like iDebit (another local direct-to-bank payment solution), and countries like the Netherlands and Germany have their own equivalents. The USA, though, still does not have a direct-to-bank eWallet solution. Canadians can use Instadebit with US dollars, but US citizens cannot use it.

The simply reason is that the US government fears this sort of anonymous payment method will be used for purposes like tax evasions, bitcoin buying or online gambling. This is what Canadians mostly use instadebit or iDebit for, and the government disapproves. USA online gambling is particularly problematic. It was strictly forbidden to gamble online in
The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), and the US government treats this very seriously. They have even confiscated PokerStars domain name a few year ago, for accepting American clients, as part of the USA vs.  Scheinberg case.

So, while Instadebit is useful for Canadians, US citizens should not hope for an equivalent any time soon.

How much does it cost?

One of the downsides of Instadebit is its fees. For every payment made from your bank account to a merchant, Instadebit charges CA$1.95. If you already have funds in your Instadebit account, due to a refund from a merchant, using those funds is free. Withdrawing funds from Instadebit, however, will cost you CA$2 per transaction.

This differs from credit card payments, which come at a cost only to the merchants.

Why Instadebit is a win-win for clients and merchants

As mentioned before, Instadebit is excellent for clients due to its ease of use and anonymity. For merchants, Instadebit simply widens their range of payment options, allowing them access to customers with different needs. For smaller merchants, who may not have the same trust levels as conglomerations such as Amazon and eBay, customers might prefer not to share their personal details.

Instadebit for online casinos

Instadebit is most popular for online gambling. Those who use online casinos and bookies often want to remain anonymous, both for personal and security reasons. Instadebit gives them that option, without compromising on convenience.

It is also safer to use Instadebit, especially when using online casinos you don't necessarily trust. Instead of giving them access to your credit or debit card, you're putting a middleman in the way, preventing the casinos from leeching off you or committing fraud against you.

Instadebit has good controls against fraud, and will absorb the impact of any dodgy dealers. Casino users love Instadebit for this peace of mind.

You can find a list of Instadebit-friendly Canadian casinos here.

Is it for you?

Online shopping is generally pretty easy these days. Whether you're using your credit or debit card, or an eWallet such as PayPal, the process is quick and generally quite safe. It’s also usually free of extra fees.

Instadebit, however, has an entirely different purpose. You wouldn't want to use it on a trustworthy site like Amazon or iTunes. That would simply be adding a costly middleman that has no real benefits.

On the other hand, when you're using an online casino, and wish to remain anonymous, Instadebit is the way to go. They come in the way of any unsolicited access to your bank account. They keep your anonymity safe, without adding any arduous processes to what by necessity is a simple and pain-free system.

Unfortunately, companies like Instadebit are regional, and limited to specific locations. However, with online shopping on the rise and more people requiring different solutions, similar companies may well be on the horizon.