Debit Card is simply a payment card issued by financial institutions to their customers maintaining account (deposit, loan or credit account) with them which is used as cash while making purchases. It is embossed plastic cards also termed as bank card, cash or check card, client card, money access card etc. To use this card limit, one must have account balance equivalent to his/her purchase amount because debit card facilitate only account balance and not credit limit like in credit card. When someone purchase the item, their designated bank account immediately get debit with the amount equivalent to their purchase value through electronic fund transfer system or digital payment system.
In few instances, cash-back facility is also attached in debit card which means one can also withdraw money at the same time while making purchase. Some debit card is designed with no physical card existence which is mostly used in doing transaction through internet or through apps in your mobile where the PIN Code need to be entered as your security code. From this you can book tickets, hotel room, purchase the items etc.
Debit card can also be used to do the transaction from Automated Teller Machine (ATM) like deposit and withdrawal of cash, take own account information, print mini statement of account etc. The debit card issuance fee, renewal fee, discount rates and transaction charges incurred while using debit card may vary in different places depending upon the facility provided in or through the debit card to the customers.
Debit Card Types:
Offline Debit Card:
It is a signature based debit card issued by the debit/credit card companies through their participating banks where offline payment process takes place. It is the combination of both debit and credit cards’ features thus can be used in any place where credit cards can be used with same discount rates and transaction fees as in credit cards. It gives access to the customers to pay cash from their bank account for the purchase they make. In offline debit card, no Personal Identification Number (PIN) Code is required but the user’s signature is compulsion in sales receipts.
Online Debit Card:
It is a PIN based debit card secured with Personal Identification Number (PIN) Code which is required in transactions done through it where online payment system is used. It is an electronic authorization of card holder. The designated bank account immediately get debit after its use. To use this card, POS machine (Point of Sale Machine) is required to swipe the card, which acts as an electronic authorization device, PINpad machine to enter the PIN, payment terminal, receipt printer etc.
Prepaid Debit Card:
This card is issued by the prepaid card companies, retailer, credit card companies or bank and it is like you are opening a transaction account held by a bank. However, unlike other debit card, prepaid card can benefit who have bank accounts as well as who don’t have because you can get prepaid debit card from retailer or credit card companies directly. For those who have bank account, it is useful to budget their expenses without worrying about overdrawing as you can spend the money only after you load money on this card. Prepaid card is not linked with your checking account like other debit cards. In order to spend money from prepaid card, you have to load money into prepaid card in advance and you can’t spend the money more than you have loaded in those prepaid cards. So, prepaid debit card is useful for people on a fixed income or for students/teenagers who get allowances and so on. You can use prepaid debit card wherever its payment network is available, such as where Visa and Master cards and so on are accepted. You can add money into prepaid debit card in several ways, such as by loading cash at participating retailers, by depositing money or checks at ATMs, by using online transfers services or by using mobile check deposits from a smartphone. However, there are lots of fees for using prepaid cards, so you may end up paying more fees than using other debit cards.
Electronic Purse Card System:
Electronic Purse Card System is a smart card with microchip and the value is stored in that card microchip. No any network connectivity required to use this card for the payment of small scale transactions. It is just like your wallet cash.
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