What is a Debit Card?

A debit card is a plastic card which provides an alternative payment method to cash when making purchases. Physically the card is just like a credit card; however, its functionality is more similar to writing a chech as the funds are withdrawn directly from either the cardholder’s bank account (often referred to as a check card), or from the remaining balance on a gift card.

Depending on the store or merchant, the customer may swipe or insert their card into the terminal, or they may hand it to the merchant who will do so. The transaction is authorized and processed and the customer verifies the transaction either by entering a PIN or, occasionally, by signing a sales receipt.

In some countries the debit card is multipurpose, acting as the ATM card for withdrawing cash and as a check guarantee card. Merchants can also offer “cashback”/”cashout” facilities to customers, where a customer can withdraw cash along with their purchase.

The use of debit cards has become wide-spread in many countries and has overtaken the check, and in some instances cash transactions by volume. Like credit cards, debit cards are used widely for telephone and Internet purchases.