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What is a Debit Card?
To enable the cardholder to withdraw money from ATM’s or to make purchases that are charged to the holder’s bank account directly, banks provide Debit card to the customers. The most secure and convenient way to say no to carry cash while making transactions. To use it at a point-of-sale (POS) and to make payments online the debit card can be used.
You can spend the money that you already have on your debit cards. There is only a small amount you can borrow which is known as the overdraft line of credit. Debit cards are easily accessible and popularly known as plastic cash which also offers electronic access to your current or savings account in any bank via Card swipes or ATM machines. Because of global usage of the debit card, the debit card issued in one country can also be used in another country within some terms and conditions. Furthermore, debit cards also can be used for making payments related to the purchases made over internet or phone.
You can apply for debit card offline or online but at present times you may get the debit card by default as when you open a savings account. Discover Card, Master Card, American express and Visa are the primary four issuers of debit cards globally. Added to these, there are also some specific debt cards popular in those countries to name a few like Maestro in the United Kingdom, RuPay in India, Unionpay in China.
Advantages of Debit Card
- Instant Transfer of Funds – With the use of Debit Card you can transfer the funds in the ATM machine and also you can do an immediate transfer of funds in dealer’s bank and merchants account.
- Easy Management – Easy carry as it is small and very useful when you travelling overseas or outstations.
- Convenience – It is easy and no personal identification is not needed usually unlike a cheque.
- Safety – As your debit card required a PIN (Personal Identification Number), you don’t have to carry much cash with you or a chequebook always to make your transactions.
- Acceptance – Debit cards are easily and widely accepted nationally and internationally.
- Within Budget – With the usage of the debit card, it helps you to plan your budget based on the available funds and this helps prevent over-expenditure.
- Easy to obtain – When you open any savings or current account in any bank, the debit card is typically included and easy to obtain than credit cards.
- Instant Cash – Immediate withdrawal of cash in any part of the country.
- Cashless transaction – There is no need to withdraw cash every time you need to shop, as you can use your Debit card for any purchases and doesn’t need to carry traveler’s cheques.
- Safety in Transactions – As your Debit card has a PIN-based protection and all your online payments are made verified by One Time Password (OTP) or MasterCard Secure Code Password.
- Discounts – Some Debit cards provide discounts, travel, dining, shopping, entertainment and more. Some Debit cards provide Cash Back on shopping.
- Insurance Benefits – Just by paying a nominal fee annually or a one-time payment you can have different types of insurance like Accidental insurance.
Limitations of Debit Card
- No Grace Period – For any transactions that are made, the money is deducted immediately and there is no grace period like Credit Card.
- Transaction Charges – Some banks charge a less nominal fee for some transactions.
- No chance of improving your credit score – Unlike Credit cards, you can’t build or improve your credit score.
- No much reward points – Hardly there are rewards points when you use Debit cards for making any transactions.
- Lower levels of Fraud protection – When compared to Credit card fraud protection, there is a little or no fraud protection for your Debit Card.
- Misuse of Debit Card is high – As there low levels of fraud protection and personal identity protection, there are high chances of misuse of Debit Card.
Features of Debit Card
- It helps to plan your budget and spend responsibly
- Debit cards are an excellent alternative to using traditional cheque
- Unlike credit card transactions, these debit card transactions are interest-free.
- Many e-commerce sites accept debit cards and it ensures in making successful payments in any part of the world with ease and simplicity.
- As a cardholder, you can experience better banking.
Benefits of Using Debit Card
- Debit card and its usage is a good alternative for cash as it safer and reduce the risk of misuse, theft and fraud. It is a secure and safe option.
- In comparison to cash or cheque book, debit cards are easy to carry and can be conveniently utilised effectively.
- With plenty of ATM machines, debit card can be used for getting instant cash as well as the provision of merchant transactions at POS (Point of sale Terminals)
- With the usage of debit cards helps in keeping a track regarding what you are spending with Instant SMS and email alerts that contain all transaction details that helps you to maintain records of your expenditure. Furthermore, by making use of the feature of add-on benefits customization, you can make the best of your debit card.
- Debit cards and its usage for purchase is a rewarding experience reason being of its innovative features like bonus points, free insurance coverage, cash back offers, redeeming options with the points that may get accumulated.
- As there is a permissible limit of spending with Debit cards you will be spending responsibly and there is an effective money management.
Debit Card Fees and Charges
There are some charges that are commonly related with the debit card, though charges may vary from bank to bank. Following is the list related to such charges.
- A fee of POS – If you are making any purchases with your debit card no extra fee is charged. For transactions that are related to fuel, surcharge which is extra at the rate of 2.5% is charged.
- A fee of Personalization – There are some personalised charges which few banks offer. Examples of personalised charges include getting your photograph on your Debit Card.
- International Transaction Charges – Charges related to Cash withdrawal, Cross currency mark-up for every transaction, when you use your debit card in foreign countries.
- Annual Maintenance Fee – In the process of usage of your debit card, a fee is charged yearly and it ranges from Rs 100 to Rs 500 and it sometimes varies as per the policies of different banks.
- Fees related to regeneration – Sometimes it so happens when you forget your PIN, a duplicate is sent to your given address with a fee of Rs 50-100 that is nominal.
- Fee related to Card replacement – Some nominal fees is charged when you want to replace the old debit card with new one. Some banks don’t charge the fee for any damaged card but do charge if it is lost.
- Transaction Charges that are domestic – Depending on the number of transactions that you make, banks levy charges if you make transactions with other banks.
Types of Debit Card
- Master Debit Card – These cards are accepted globally and help in coordinating the payments related to the process between card issuing banks and banks of merchants and you can enjoy banking services that are uninterrupted. It enables you to keep a detailed record all the purchases you have made during that particular period of a month.
- Visa Debit Card – This type of card is a popular brand and issued by Visa globally. To access their respective bank account for the customers, many major financial institutions and banks issue Visa Debit Cards. This Visa Card with its concierge services assists in many services for example hotel bookings, flight bookings, car rental bookings from any place in the world.
- Visa Privilege Debit Card – This card is Valid Domestic & International. In POS, the maximum amount that can be used is 1 lakh and Rs 50,000 per day in ATM. This card can also be used ID card as it has the signature and photo of the cardholder.
- Pension Card – Exclusively this card is provided for a pensioner with a signature, blood group and photo of the pensioner. With this card, the pensioner has the overdraft facility to one month’s pension facility.
- RuPay debit card – Introduced in the year 2012 in India, RuPay was introduced by National Payment Corporation of India. RuPay Debit card was created to have an open loop, domestic and a system related to the multilateral system of payments. When compared to other variants related to the debit card, transaction cost is comparatively low and it has greater reach in rural areas of India. This card is valid in India, Bhutan and Nepal.
- Chip and Pin Debit Card – The latest version of the technology is used in this type of card and it has a chip and in a format that is encrypted and it transacts the related data. The (Personal Identification Number) PIN is required to make each transaction.
- Magnetic Stripe Debit Card – On the band of a magnetic material of a card, by modifying the magnetism of particles related to tiny iron-based, this type of card has the capability of storing data.
- Contactless Debit Card – The technology related to RFID (Radio-frequency identification) is used in this type of debit cards. Just by a single tap, transactions are made with these cards.
- Prepaid Debit Card – You don’t require any account to have this debit card. You have to load money and start using this card. Foreign Exchange Card is one of the examples of this Prepaid Debit card.
- International Debit Card – As the name suggests this Debit Card can be used overseas. The extra charge which is known as Foreign Exchange Markup is levied on the total transactions.
- Business Debit Card – This cards also known as Business debit cards and are designed and issued for the people of corporate specifically for their business purposes.
- Virtual Debit Card – This type of cards can be accessed via making any online payments or phone and are not like debit cards that are physical.
Top Banks providing Debit Cards in India
In India, almost all banks provide Debit Cards. Following are some of the top banks
- State Bank of India Debit Card. – State Bank of India provides State Bank Classic Debit card and you can get access to your account wherever and whenever you need. You can use it to withdraw cash, for making any online payments and purchase of any goods at establishments related to the merchant. Uses of this card includes
1. You can shop at outlets related to the merchant in India over 5 lakh.
2. You can pay bill payments, travel and book movie tickets online
- PNB Debit Card – On the front side of the card it has RuPay/Master logo and this logo is accepted globally at MasterCard ATMs and establishments related to Merchant and Point of Sale Machines. You can make any online transactions related to e-commerce. Seven years is the validity of this card.
- HDFC Bank Debit Card – With this card you can do shopping online and in stores. The transactions that you make with this card are smarter, safer and cheaper. When you shop online or offline, you can earn Points. Furthermore, there is an option related to Insurance Cover up to Rs 10 lakhs related to Free Personal Accidental Death
- Bank of Baroda Debit Card – With this card you can well access on all Interconnected ATMs of Bank of Baroda in India. You can shop offline and online at major outlets related to the merchant in India and also abroad. You can enjoy cashless power related to purchasing.
- Axis Bank Debit Card – these cards are secure and you can access anywhere and at any time. There are attractive rewards and offers related to this type of debit card. It has a daily withdrawal limit of Rs 50,000 and the limit related to purchase of Rs 400000.
- ICICI Bank Debit Card – With this Debit Card, you can pay your bills online and can withdraw cash globally. There are attractive offers and rewards on shopping and also on booking of your online tickets related to travel.
- Bank of India Debit Card – This card is valid in International as well as in Domestic and can be used in all major POS (Point of Sale) outlets. Per day 15000 is the limit that is maximum that can be withdrawn and Rs 25000 is the maximum amount that can be used at POS per day
- Canara Bank Debit Card – With this Debit Card/ATM you can use only in India. If you are using this card at international level, that card should be requested by the customers and this type of cards have PIN and EMV Chip and the charges related to issuance is Rs 250. It has a withdrawal limit per day of Rs 40,000.
How Does Debit Card Work?
- Debit card can be used as a method of payment.
- It withdraws money from savings account where funds are already there.
- It combines both the functions of cheques and ATM Cards,
- The money is swiftly deducted from your account when you pay with your debit card.
- There are no activities related to borrowing and repayment in debit card transactions.
- You can use your debit card in POS machines as well as to make online purchases.
Debit Card in India
Debit cards were introduced in the year 1970 globally that made the financial aspects to move fast. In India Debit card was introduced in the year 1987. With just a tap or a swipe of a card, payments and transactions are done. As the financial institutions are issuing debit cards with personalised designs and features the popularity of ‘debit card and ‘plastic money ‘has increased to a great extent.
Debit cards are the better alternative to cash and useful to manage your day-to-day expenses and without overspending much and effectively planning your budget. As the debit card is linked to your bank account you will get email or SMS alerts thus reminding to you every transaction. For online purchases and transactions, Debit cards are increasingly used and this transactions and purchases are carried on platforms offered by banks that are secure payment and these are offered as part of their solutions related to e-banking.
In India, almost each and every bank offers debit cards with benefits and features depending on the bank account. Generally, to provide a secure platform for users to transact on, collaboration with various payment platforms debit cards are issued.
How do I Choose a Debit Card?
Customers choose a debit card that is holding current or savings account based on their needs and requirements. Before making any choice, compare few of debit cards as each debit card have unique features and offers, like the services offered, fees levied and also the minimum balance requirements. If you are the high spender, some debit cards offer reward programs.
To avoid any fraudulent activity, ensure that payment platforms and banks are secure. Though the debit card is full packed with the offers and privileges always focus on choosing a card that is suitable based on your financial needs.
How Beneficial is Using Debit Card over Cash?
Debit can be defined as the electronic purse which helps the cardholder to withdraw cash from ATMs and enables to purchase goods or services just by a swipe. Debit Cards are issued mostly in collaboration either with MASTER or VISA Card.
- The debit card helps in reducing the cash and provides tremendous convenience in online payments.
- Using Debit card replaces carrying large amounts of cash, in the case of making big transactions. Furthermore no service charges and no interest
- Effective usable at POS and SIM card and can be used at ATMs too.
- Debit cards provided to you are linked to a bank account. For every current or savings account, the banks provide customers with debit cards. Your debit card can also be linked to multiple bank accounts in some cases.
- When the swiping of your debit card happens the amount of the customers comes out and it is transferred to the merchants.
- Multiple account access – Linked to a single card, customer can access up three accounts In case of a Joint Accounts, Add-on=Cards are issued
- You can make online Transactions that are secured
Unlike in the usage of cash, the users of the debit card receive monthly statements, which will give them an idea about their expenditure through their cards and also helps them to track and plan accordingly.
Documentation needed to apply for a Debit Card
Opening up savings or current account will help you to get Debit Card. Following are the documentation needed.
- Identity Proof that includes Photo proof like Ration Card, Passport Voter ID card, Pan Card etc.
- Passport size photograph
- Aadhar Card or your Driving License
Debit Card Eligibility
The eligibility criterion for Debit Card includes having Savings or Joint Account and Current Account in any Bank. Almost all banks in India provide Debit cards.
How to close Debit Card?
Following are the ways to close your debit card
- First, reduce your savings or current account balance to zero
- Call to the customer care of the respective bank and communicate
- Go to the branch of that bank and fill out the debit card closure form
The procedures of closing Debit card differs from bank to bank.
Important Precautions to Prevent Credit Card Fraud?
- You should never disclose your PIN
- Ensure your card is swiped by the vendor in front of you when you doing any Point of Sale transactions. Furthermore, always keep confidential any four CVV2 the 3 digit number that is printed on your reverse of your debit card and never disclose to anyone.
- For making secure transactions, always ensure that the URL should be https (and not HTTP) while doing any transactions relate to online
- If you have any doubt or you suspect that your card is compromised, you had to immediately contact the bank’s customer care.
Debit Cards FAQ’s
1. What is a debit card PIN?
The full abbreviation of Debit Card ‘PIN’ means Personal Identification Number. While performing any card purchases transactions, PIN is used and it is a numerical code provided as a security feature. The Bank provides debit card along with the PIN to be used while making any transactions. In order to provide protection to their respective bank accounts, customers related to banking are advised to keep their PIN number safe and confidential.
2. How to get a debit card?
If you open a bank account you will get a debit card and you have to contact your bank’s customer care if you didn’t receive the Debit Card or if you have an old account which was opened when the debit cards are not in use.
3. What is Personal Identification Number (PIN)?
PIN is a four-digit unique number that is provided with your Debit Card, access to make any transaction like and to your cash (mini-statement, balance enquiry, withdrawal). It is important to keep your PIN confidential and safe and also make sure that you never write your PIN at the back of your debit card.
4. What to do if sometimes you forgot your PIN or if it is not working at all?
By visiting banks’ ATM or through net banking you can get a new debit card PIN online. You have to give your CVV number which is printed on the back of your card and your debit card number and to your registered mobile number, a new PIN number will be sent.
5. Using your debit card, is there any transaction limit on the amount that can be withdrawn?
There are withdrawal limits on daily cash, depending on the type of the debit card you hold like premium cards etc. the withdrawal range would be from Rs 15000 to Rs 200000
6. Are there any numbers of transaction limits that you can make on your debit Card?
Yes, four transactions a day, some banks have transactions limits and it again differs from bank to bank.
7. For using a debit card for cash withdrawal, are there any charges levied?
Usually withdrawals from the same bank’s ATMs are free, however, a nominal fee is charged by some banks, some banks charge more than five transactions from your bank’s ATM.
8. On using a debit card for transactions at another bank’s ATM, are any charges levied?
By using a debit at another bank’s ATM are free for the transactions that are first five made per month, and after this limit, a fee of 20 is levied on the every transaction you do. The charges levied are subject to change from time to time.
9. If you are using the debit card on online shopping or POS (Point of Sale Terminal) are there any charges levied?
Generally, there are no charges levied for using the debit card for doing online shopping and at POS. However, the charges are determined from to time.
10. Is there any Renewal Fees for Debit Cards?
Only a few banks charge a nominal fee and depending on the type of the card you are using.
11. In the case of loss of your debit card what to do?
At any point of time when you lost your card, you have to report the card loss to the bank’s customer care and your card will be blocked after answering some questions of customer care.
12. What is the difference between ATM Card and Debit card?
The card is used primarily for cash withdrawal at ATMs, whereas Debit card not only used for withdrawal of cash but also for online purchases and which directly debits from your bank account.
13. What is CVV number?
The 3 digit code entered on the back of the Debit card is known as CVV number, as a form of authentication, this value is required for IVR and online transactions.
14. Are there any options for changing the debit card PIN?
You can change your debit card PIN by calling to your bank’s customer care. Furthermore to your registered communication address, you can also request for the PIN to be delivered in a physical form.
15. How to use your debit card for retail transactions?
When you give the card to the merchant and at a Point of Sale (POS) terminal dips or swipes the card by entering the transaction amount on the POS terminal. After prompting for Debit Card ATM Pin you have to enter your PIN, once the charge slip comes out you have to sign the slip and the transaction is confirmed and complete.
16. On using my Debit card for online or retail transactions is there any fees charged?
When you are using your Debit card at online purchases or at retail outlets, there is no fee charged, however in certain categories related to merchants a fee may be charged.
17. For the debit card transactions, will I get any intimation?
You will receive email and SMS alerts for all your transactions that you have done with your Debit card to your mobile number that is registered with the bank.
18. What is verified by MasterCard or Visa Secure Code?
Verified by Master card and Visa Secure code is a service that helps you to protect your purchases related to online through a personal Secure 6 digit numeric 3D secure password.
19. What is written on the Debit Card and what is the information which is written on it?
Following is the information that is written on your Debit Card
- Your name
- Digit CVV code
- Expiration month and the year
- The transactions carried out through cards and how are they protected against the usage of fraudulent.
The cardholder has to key the PIN that is known only to him or her for their transactions at ATM. If you are carrying the transactions at POS, the cardholder has to key in PIN which is known to the card holder. Except in the case of international websites, the element of authentication is applicable.
20. Tips to use debit card safely
Always keep your Debit card Confidential – Never write your Debit card PIN in any place always remember the PIN number and also never share it. Furthermore never share your PIN number via email, Phone, Social Media, and alike.
DMRC launches cashless token sale, recharge through cards facility
12 July 2017: New Delhi: In order to provide convenience and fast access to its services, Delhi Metro Rail Corporation (DMRC) has recently launched a cashless sale of tokens at its Lal Quila Metro Station of Phase-6. Subsequently, the service will be expanded to all its 400 Token Vending Machines and Recharge Card Terminals by the end of this year.
The commuters can now use their debit or credit cards to directly pay for their travel. In the same manner, they can also use their debit or credit card to recharge their smart cards. The same can be done from anywhere through DMRCs website dmrcsmartcard.com. A nominal surcharge will be levied on every such transaction using debit/credit cards by the respective bank.
SBI reports highest Debit Card transactions in April
4 July 2017: Country’s topmost lender, State Bank of India (SBI) reported the highest number of debit card transactions in the month of April. As per the Reserve Bank of India’s report, the bank reported a total transaction of worth Rs 11,720.73 crore in April which is 31 percent share of the market.
The number of transactions far outstripped the onsite and offsite transactions of HDFC Bank and ICICI Bank which were around 3.52 crore and 3.27 crore respectively. Following note ban in November; while SBI rose from 30% to 31% of market share, both HDFC and ICICI saw a drop. At the end of April, SBI had nearly 35 crore debit cards while HDFC Bank has 2.39 crore debit card holders and 3.7 crore card holders for ICICI Bank.
First in itself: DCB Bank launches iris-based ATM
30 June 2017: Hyderabad: First time in the history, a mid-sized private lender bank DCB has launched an ATM that dispenses cash by verifying iris or fingerprints of the customers, similar to Aadhar verification.
According to a statement by the bank, the high-tech ATM has been installed in Telangana’s capital, Hyderabad. The bank’s move is undoubtedly considered to be a technological leap over its larger rivals.
Though the machine still accepts debit cards, as per the bank, the ATM uses a customer’s Aadhar for the purpose through which it scans the iris and fingerprints impression to verify the details of the customer.
On the launch of new technology, the bank Chief Financial Officer, Bharat Sampat told that the customers are delighted to have country’s first Aadhar-based ATM in the state.
The bank has also recently opened three more branches in the state in Mancherial, Mothe and Narsapur.
Karnataka Bank Launches New Platinum Debit Card
31st March: Karnataka Bank has launched a new platinum debit card. The card has been named MoneyPlant TMRupay.
It is an international debit card that has been designed to enable increased number of privileges to their premium customers.
This card can be used both for international and domestic withdrawals of cash and transactions for purchase.
Individuals can withdraw upto Rs 75, 000 and purchase upto Rs 2 lakh in a day. The card also has the features of an amount of Rs 2 lakh for the insurance coverage for personal accidents.
This card comes with a lot of added benefits and it is actually a part of Karnataka bank’s initiative for its customers to experience their digital banking segment.
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