The history of banking is the history of money and banks have existed in one form or another since 2000 BC. The modern bank is the pinnacle of banking evolution and debit cards represent that apex of the banking evolution. Debits cards are the most convenient form of money; think about it at first we had battering, then came coins, coins were then replaced by paper cash, and nowadays we have plastic money.
What is a debit card?
Debit cards or Check cards are money in a plastic form. When you think about it: paper money is just a representative of monetary work and plastic does the same job. You can use your card to pay for items where otherwise you would have used cash.
The benefits of plastic money are self-evident:
Plastic money is a lot safer; you don’t have to carry around as much cash and stealing money through your plastic card is a lot harder.
You can also use debit cards to buy and sell things online. This has allowed a whole new industry to be born. Amazon has become the biggest company on earth on the back of debit cards.
How a debit card works?
The way that Debit cards work is simple: you buy something online, or through a physical location and pay using a Debit card and the corresponding money will be deducted through your account and be paid to the seller. The debit card is always interconnected to your checking account which means that any account owner has 24/7 access to his or her account.
Types of debit card transaction:
Each debit card has a personalized PIN. There are a variety of ways that debit card transactions happen:
Electronic Funds Transfer at Point of Sale (EFTPOS): This is the most common type of debit card transaction. All those card swapping transactions come under the EFTPOS. The more common name of the EFTPOS is the PIN debit or the online debit.
The EFTPOS works through a very simple process. You will just need to swipe the card through a terminal and enter your PIN code. This two-step security process will authenticate your identity and the transaction will be processed.
Signature Debit, also known as offline debit: The offline debit works in a very similar way to the EFTPOS. The only difference is that a physical signature is required along with the PIN and the card to authorize the transaction. The fund will be taken right out of the account holder’s money but there is usually a delay. Only big-name companies like Visa, or Mastercard debit cards are capable of Signature debit.
Electronic Purse Card System: this is a smartcard-based electronic purse system, and this system is widely used in the more modern countries, the electronic purse card system is most commonplace in Europe. In this process, the money is located or stored inside the actual card chip. This allows the cardholder to make contactless payments.
The Electronic Purse Card System and Electronic Purse Card System are how you can make online payments or make payments without using a physical card.