In an age wherein cash transactions are well on their way to becoming obsolete, it is difficult to imagine a time before debit cards. But there was such a time where one had to go to a bank, withdraw money from his or her account, and spend that money on various expenses till as when the time came to make another trip to the bank. Those were confusing and difficult times, and then the debit card came along. In Fact the debit card has been around since 1966. Around the world, debit card transactions clocked in at 300 million in 1991. In 2009, prepaid cards and debit cards were utilized for monetary transactions, 37.6 billion times across the globe. It’s difficult to deny the impact and widespread use of debit cards. As such, it is worth your time delving deeper into the subject of debit cards, especially in India.
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First Debit Card in India
It is very probable that HDFC was the first bank to issue debit cards in India as this major bank is the first bank to introduce ATM facilities in the country, in Mumbai, in 1987. Since then, the use of debit cards has exponentially increased in India. Read further for information on uses of debit cards and varying debit card types.
Function of Debit Cards
While the most widespread use of debit cards in the country is for withdrawal of cash at an ATM by the card holder, there are multiple other uses for debit cards; all of which are as listed below.
- Debit cards can be used to pay for goods and durables at malls, shops and supermarkets.
- One can use a debit card to deposit money into an account at an ATM.
- Debit cards can be used to purchase consumer durables online.
- Debit cards can be used to purchase fuel at petrol pumps and gas stations.
- These cards can be used to pay utility bills online.
- Paying credit card bills online with a debit card is also a possibility.
Difference Between ATM and Debit Cards
The terms ‘ATM card’ and ‘debit card’ are often used as if they are interchangeable. However, in the true sense, an ATM card is simply a plastic card with a PIN, which can be used to withdraw money at an ATM. Debit cards are in fact so much more, and allow for cashless payments at retail outlets, online purchases and online payments. An ATM card does not have these features. Additionally, a debit card should not be mistaken for a credit card, even though it allows for similar uses. Unlike a credit card, debit cards do not extend credit to card holders.
Types of Debit Cards in India
Debit cards are of various kinds depending on bank tie-ups with payment merchants and various benefits and advantages these cards offer. Listed below are the common debit card types issued by banks in India.
- Visa Debit Cards – Banks having payment service tie-ups with Visa issue Visa debit cards. These cards come with the Verified by Visa advantage which offers secure online transactions via the Visa payment platform.
- Visa Electron Debit Cards – Only slightly different from Visa debits cards, these cards do not come with the advantage of an overdraft ability.
- MasterCard Debit Cards – Banks having tie-ups with MasterCard payment services offer their customers MasterCard debit cards. These cards come with the advantage of seamless global access to funds in one’s account and secure online payments via the MasterCard SecureCode payment portal.
- Contactless Debit Cards – Using Near Field Technology (NFC), these cards offer the card holder the advantage of contactless payments to any PoS terminal within NFC range.
- RuPay Debit Cards – Launched by the NCPI as a national card scheme, these cards facilitate online transactions via the Discover payment platform and ATM deposits and withdrawals, through the National Financial Switch network.
- Maestro Debit Cards – Banks having a tie-up with Maestro payment services founded in 1992, offer Maestro debit cards. Maestro is an offering by MasterCard and is an international debit service that has a presence worldwide in 100+ countries.
Steps for Obtaining a Debit Card
While debit card usage is widespread in the country, not everyone has one. It’s possible that the reader is already aware of the fact that opening an account in any bank automatically warrants the issue of a debit card. However, most banks will issue a default card of a particular type. If you wish to obtain a specific card type from the list featured above, make your need known to the bank while opening an account. Many banks such as SBI, HDFC, HSBC, ICICI and Axis Bank issue an instant kit upon opening a savings account. This kit contains a debit card with debit card PIN, a cheque book, a pass book and even a welcome leaflet. If you wish to have your name printed on your card, it often takes banks a duration of 10 to 15 days to comply with your request, after which the card is mailed to your correspondence address.
Charges for Debit Card Services
It must be noted that apart from withdrawal and other transaction fees, banks also charge for debit card services such as reissuance of card, annual card maintenance and PIN-regeneration.
- Charges for Debit Card Replacement/Reissuance – Most banks replace or reissue a lost debit card for charges that range from Rs. 120 to 200 INR.
- Annual Maintenance Charges – Annual maintenance charges vary according to the type of card issued. Maintenance charges for classic cards range between Rs. 60 to INR. 150. This charge could go up for Platinum cards, while some banks may waive this charge altogether.
- PIN Regeneration – PIN regeneration using net banking or mobile banking does not attract any charges in most cases. However, real time assistance for PIN regeneration at most banks, may come at a charge ranging from Rs. 25 to Rs. 50. Some banks do waive this charge.
ATM Withdrawal Charges
Banks do have charges for cash withdrawals that you make at an ATM, these charges apply after a number of free transactions that differ from bank to bank. The infographic below provides all the information you need on ATM withdrawal charges for major banks in India.
from own bank ATM
from another bank ATM
|Financial Transaction Charges||Non-Financial
|Axis Bank||5||3||Rs. 20+GST||Rs. 9.55|
|ICICI Bank||5||3||Rs. 20+GST||Rs. 8.50+GST|
|IDBI Bank||Unlimited||5||RS. 20||Rs. 8|
|Bank of Baroda||Unlimited||Subjective to Bank Policies||Rs. 20+GST||Rs. 10+GST|
|HDFC Bank||5||3||Rs. 20+GST||Rs. 8.50+GST|
|SBI||Unlimited for Salary Account||Unlimited for Salary Account||N/A||N/A|
|Kotak||Unlimited||Unlimited||Rs. 20+GST||Rs. 8.50+GST|
|Canara Bank||Unlimited||Unlimited||Rs. 20+GST||Rs. 10+GST|
|Punjab National Bank||Unlimited||Unlimited||Rs. 20||Rs. 20|
Debit Card Incentives and Add-Ons
Banks offer their customers a wide range of incentives and add-ons that can be availed of through a debit card. These incentives and add-ons are aimed at making the banking experience for debit card holders so much more than any time access to cash from an ATM, cashless shopping or online payments and purchases. Some widely favored debit card incentives and add-ons are as listed below.
Debit card holders of certain banks often have access to retail discounts at certain stores and malls and even on E-commerce platforms. These discounts can range from anything from 5% to 30% off on purchases made using a debit card of a specific bank.
It may come as a surprise to many that having a debit card can often provide access to insurance coverage of up to 10 Lakh rupees. Insurance coverage on debit cards come with certain terms and conditions attached, as is expected from all insurance schemes. As such, customers are served best by enquiring about insurance coverage on debit cards from their bank.
One of the most popular incentives offered to debit card holders of certain banks are merchant cashbacks. These cashbacks allow debit card holders to shop at certain retail outlets or purchase certain consumer durables and get a percentage of the costs incurred back. These cashbacks apply to a wide range of purchases ranging from apparel to home appliances and even gadgets.
In conclusion, withstanding the transaction charges and service charges associated with debit cards, these cards have come to be indispensable financial tools. Debit cards not only facilitate easy access to cash but also promote hassle-free cashless transactions that work for the benefit of consumers and businesses.