INTRODUCTION OF DEBIT CARDS

The debit card has emerged from the shadow of its older sibling, the credit card. Over the past
decade, debit card has grown from accounting for 274 million transactions in 1990 to 8.15 billion
transactions in 2002, to challenge the credit card as the preferred payment card. As it stands, the
debit card industry is a multi-billion dollar engine that helps drive bank profits and point-of
purchase consumer sales - but is also beginning to redefine traditional payment options in the
business and government sectors, such as food stamps, benefits, and payroll.

MEANING AND FUNCTIONS OF DEBIT CARDS

Two decades ago, the number of debit cards in circulation was approximately 19 million. This
figure is projected to cross 34.4 million by 2016.

A debit card (also known as a bank card or check card) is a plastic card that provides an
alternative payment method to cash when making purchases. Functionally, it can be called an
electronic check, as the funds are withdrawn directly from either the bank account, or from the
remaining balance on the card. In some cases, the cards are designed exclusively for use on the
Internet, and so there is no physical card.

In many countries the use of debit cards has become so widespread that their volume of use has
overtaken or entirely replaced the check and, in some instances, cash transactions. Like credit
cards, debit cards are used widely for telephone and Internet purchases and, unlike credit cards,
the funds are transferred immediately from the bearer's bank account instead of having the bearer
pay back the money at a later date.

Debit cards may also allow for instant withdrawal of cash, acting as the ATM card for
withdrawing cash and as a check guarantee card. Merchants may also offer cash back facilities to
customers, where a customer can withdraw cash along with their purchase.

Debit cards can also allow for instant withdrawal of cash, acting as the ATM card for
withdrawing cash and as a cheque guarantee card. Merchants can also offer "cash back"/"cash
out" facilities to customers, where a customer can withdraw cash along with their purchase.
Types of Debit Card systems

 Online Debit Card

 Offline Debit Card
 Electronic Purse Card System

 Prepaid debit cards