Visa has taken an initiative to create awareness about using debit cards instead of cash to make India cashless. It highlighted that a debit card is more than just an ATM card and can be simply swiped on the point-of-sale (PoS) device instead of going to ATM counter to take out cash. A debit card actually simplifies purchases for consumers and consumers can pay for almost everything instead of using cash again and again.
What is a Debit card?
For many a people, a debit card is envisaged as a card that lets you withdraw cash from an ATM, based on the balance in your bank account. That’s not the only thing it is meant for. A debit card actually simplifies purchases for consumers. Today you can pull out your debit card and pay for almost everything – groceries, movie tickets, travel tickets, home delivery, food, memberships, electronics – you need on daily basis.
It assists in making in-person and online payments by withdrawing the amount digitally from your own bank account, unlike a credit card where you borrow money from the bank. According to the data by Reserve Bank of India (RBI), the country has 992.4 million debit cards in circulation. However, about 70 per cent of these cards are used for transactions only at ATMs, which shows how limited a consumer thinks the use of a debit card is.
ATMs were introduced for easier and simpler ways to dispense cash, although most ATMs have a limit of withdrawing cash only up to INR10,000 in one transaction. A debit card can be used to make payments instead of first withdrawing cash and then paying for purchases. This eases the hassle of handling massive amounts of cash for the consumer and the shopkeeper. It also helps in keeping a tab on expenses as every transaction trigger an SMS to the registered mobile number and also appears in the account holder’s monthly statement.
Furthermore, with shopping sales every now and then, one can look out for various offers on their debit cards.
Are debit cards secure?
Another factor that acts as a deterrent for consumers in using their debit cards at PoS terminals is the concern surrounding safety and security. When a cardholder is making a transaction on acceptance terminals/PoS machines, you are required to input your PIN to authenticate the transaction. When you input the correct PIN for your card, only then does the transaction get processed and completed.
“With mere 2 lakh PoS terminals in 2016 to more than 34 lacs now, there has been continuous improvement in the payment infrastructure of our country, adding more touchpoints where customers can use their cards to make payments. While the government has been making efforts across the ecosystem to stimulate digital payments, it is now the duty of citizens like us to make more efficient use of such facilities and contribute to the nation’s fight against cash. Cash should become the last resort to pay,” Group Country Manager for India and South Asia, Visa, TR Ramachandran, said.
India has taken big steps to move from cash to a less-cash economy with major developments in payment infrastructure. Recently, the RBI issued guidelines on Tokenisation, allowing for a safer card transaction where it replaces a consumer’s card number with a digital token that is hard to hack and even if compromised, is rendered useless to the fraudster. Along with this, RBI had also made it mandatory to replace all existing magnetic stripe only cards with EMV chip enabled cards. With increasing penetration of contactless cards in the market, there has been a noticeable increase in its usage by consumers for transactions below Rs. 2000.
How to get a Debit card?
For a consumer to obtain a debit card, it is compulsory for him to have a bank account and complete some associated paperwork. Once a consumer obtains his debit card, he needs to first activate it at an ATM with a four digit PIN that he receives separately from the bank. The debit card allows you to start paying digitally instead of using cash as the money is automatically deducted from your bank account. A consumer can make transactions with a debit card at either a PoS terminal, online or ATM.
With more than 1,300 ATMs closing during Oct 2018 and the Confederation of ATM Industry warning that more ATMs may be forced to shut down due to cost escalation, it is now time to move to cashless transactions and make a habit of paying for purchases using a debit card, truly unleashing the power of the debit card.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network – enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit usa.visa.com/aboutvisa, visacorporate.tumblr.com and @VisaNews.