One popular usage scenario for prepaid debit cards is as a mechanism to transfer payments or fees to independent contractors, including independent contractors overseas. One of the biggest card programs in this category is ePassporte. ePassporte users got a big shock this week when they found that Visa International suspended the Visa program of ePassporte’s banking partner (St. Kitts Nevis Anguilla National Bank).

The following message was sent via email to ePassporte account holders:

Dear ePassporte Account Holders,

Please be advised that, at 12:00 PM PDT today, September 2, 2010, we were notified that effective immediately, Visa International has suspended our banking partner’s (St. Kitts Nevis Anguilla National Bank) ePassporte Visa program. The ePassporte e-Wallet program continues to be up and running, except funds cannot be transferred between your Visa Account and your e-Wallet. At this time ePassporte can no longer issue Visa Cards, and the ability for our Account Holders to make point of sale purchases and withdraw funds from ATMs has also been suspended.

At this time we do not know why this drastic action was taken by Visa. To us, it is unconscionable that such action would be taken without the opportunity for ePassporte to fully understand Visa’s reasons and to be able to take all steps necessary to keep our program running the way it has so successfully done for over 7 years. But that is what Visa has done.

As soon as we have more information we will be in contact with you.

In the meantime please be assured that your funds are safe.

We are very sorry for the short notice and apologize for any inconvenience this may cause. The ePassporte team is working diligently to rectify this situation.

We kindly ask you to bear with us while we work through this issue.

Please feel free to contact us via the message center or at our call center, should you have any questions, comments or concerns.

It appears that the users who are most affected by this move are account holders outside the U.S. who use ePassporte to receive payments from U.S. businesses. ePassporte users who have U.S. bank accounts will not be affected as “You can withdraw funds from your ePassporte Account to a verified US checking account or request a bank wire transfer.”

ePassporte users who do not have a US checking account or an ability to receive a bank wire transfer are stuck without a payout solution, as they relied on ePassporte’s Visa-branded products to withdraw cash at ATMs.

At this point, it is unclear why Visa International suspended the program.