Debit cards are issued by banks by linking it to inddividual custmers like SB/Current account holders,(in case of properietory concerns of Current Account/Cash Credit account,card will be issued in the name of the proprietor). The debit cards are akin to credit cards; the only difference is that the debit card holders do not enjoy credit facility against their card. The card transaction will be authorized for payment only after the debit transaction takes place in the card holder’s bank account. Thus the debit card payment will not be approved at merchant establishment/ATM if the balance in the account is insufficient to cover the transaction. Therefore debit card holder needs to maintain required balance in his/her account for the operation of the card.
Advantages of debit card:
The debit card holders need not worry about timings of his bank or bank holidays to withdraw the cash from ATM. ATMs provide round the clock services and card holders can draw money, at any time convenient to them.In emergencies like payment to be made at the hospital or at such other exigencies, the card holders will have the same convenience of holding ready cash.The card payment is error free and suitable compared to cash payments. In cash payments, there is a possibility of short payment or excess payment or difficulties in tendering exact changes at payment counters.The card holders do not face the danger of inadvertently accepting counterfeit notes as it happens in cash transactions.Further, carrying debit cards while traveling is much safer compared to carrying cash. The cash if stolen, the chance of getting back is difficult, whereas if the card is stolen the thief cannot utilize the card unless he knows the numeric password (PIN). The Cardholder can also immediately report to the card issuing bank to stop the transactions of the lost card.Online booking of air tickets, railway and bus tickets, and cinema tickets or buying items under e-commerce is possible through card payments. The payments of utility bills like the electric bill, telephone bill, water bill etc. can be made through online card payment which saves time and money to visit bill collection offices for cash payment.
A debit cardholder can use the card for the payment of purchase of goods and service at online purchases and at merchant establishments like Malls, Shops, Hospitals, Petrol bunks and other service providers.Debit cards can also be used for payment of utility bills, transferring funds to bank accounts, credit cards and prepaid cards within the country.SBI has introduced cash withdrawal by debit cards at POS. At present SBI debit card holders can withdraw at the maximum of Rs.1000/-daily by using debit cards.For cash withdrawal at ATM, the card holders are permitted to withdraw cash per day up to a threshold limit fixed by the bank, either at its own discretion or by the option of the customer, which normally ranges between Rs.5000.00 to 50000.00.
Debit cards for international usage: Debit cards can be used both domestically and internationally subject to card is enabled for international use by the bank. RBI has mandated that banks may issue new debit and credit cards only for domestic usage unless international use is specifically sought by the customer. Such cards enabling international usage will have to be essentially EMV Chip and Pin enabled.
Debit cards for visually impaired customers:Banks nowadays started issuing debit cards to visually impaired customers with certain additional safeguards due to the issues involved in their accounts through ATMs.