Debit cards

An alternative payment option to credit card could be debit cards. Debit cards are one of the fastest-growing forms of e-payment. They are promoted as safer than cash and more convenient than paper checks. The following paragraphs will take a view on this topic.

Two types of debit card transactions occur:
online and offline.
Online debit transactions require consumers to submit their personal identification numbers (PINs) at the point of sale. In brick-and-mortar stores, customers initiate online debit payments by swiping their ATM cards through magnetic card readers and then entering their secret codes into terminal peripherals called PIN pads. These transactions are processed in real time through nationwide ATM networks. Funds in customers' accounts are captured immediately and transferred into merchants' accounts in two to three business days. Merchants typically pay discount and transaction fees based on rates set by the ATM networks.

Unlike online debit transactions, offline debit payments do not involve PINs. Offline debit cards--aka check cards--are typically issued by large credit card companies through their participating banks. Consumers today make the majority of their offline debit purchases with the Visa Check Card or MasterCard's MasterMoney card. These enhanced ATM cards carry the Visa and MasterCard logos, respectively, and may be used everywhere the credit cards are accepted, including over the Internet.

Debit card is an attractive alternative to credit card and one should consider whether this payment method is the best for business.