Debit cards are plastic cards that we use to pay instead of cash when making purchases. It is also known as a bank card or credit card.
It’s not like a credit card. Credit cards lend you money when you buy things, while debit cards debit your bank account. hence the name.
Buyer’s card may contain stored value. However, most of them forward a message to the buyer’s bank to withdraw money from a particular bank account. Sometimes the primary account number is assigned only for online payments; ie no physical card.
Finances Jungle has the following definition of debit card:
“A small plastic card that consumers use to buy goods and services. When the cardholder makes a purchase, money is automatically debited from their bank account.”
Debit cards, checks and cash
In many countries, the use of debit cards has become so widespread that their volume exceeds the number of checks (UK: checks) and in some cases even cash payments.
“The development of debit cards, unlike credit and charge cards, is generally country-specific, resulting in a number of disparate systems around the world that are often incompatible.”
“Since the mid-2000s, a number of initiatives have allowed debit cards issued in one country to be used in other countries and enable their use for internet and phone purchases.”
This type of card also works as a bank card. In other words, we can use them to withdraw money from automatic teller machines (ATMs).
Three types of systems
There are currently three main types of debit card programs:
- online debit
Online debit cards require electronic authorization for each payment. All approved payments appear instantly in the buyer’s account. There may also be a PIN (personal identification number) authentication system.
- Offline throughput
Offline cards with logos of major credit card companies such as Maestro, MasterCard, and Visa. Cardholders use it at the point of sale just like a (signed) credit card.
Sometimes these cards have a daily limit that can be equal to the maximum daily withdrawal amount.
With this type of card, the transaction details will appear in the cardholder’s bank account after two to three days.
- E-wallet card
The card’s chip records the amount available for purchases. Therefore, the seller’s machine does not need to be online. This type of card has been popular in Germany, Austria, France and some other European countries since the mid-1990s.
