The days I still remember when we wanted to get a debit card from the banks so that we don’t have to stand in the long queue of any crowded Bank’s branch payment counter and waste the whole day to withdraw a few thousand of Rupees. Banking has changed a lot during the last decade. Every day a new technology is replacing the older one. But one thing has not changed and it is the debit card. Still, everyone asks for a Debit card just after opening the bank account. The banks also know it and they will try to provide you a simple debit card with some value addition like offers, rewards or cashback, etc to avoid payment rush in branches.
Today’s banking is getting more digitalized and banking apps are replacing the many traditional banking works. Still, the majority of us think debit cards are meant for ATM withdrawal. But what we don’t know that we can use a single debit card for various banking works other than cash withdrawals. And for that reason, every bank first provides you a debit card even if you don’t ask them. Because it also reduces the workload on bank branches.
Here in this article, I will discuss the advantages of debit cards and different types of debit cards in India offered by the Indian Commercial Banks to its customers.
Before getting into the actual topics let’s have some ideas about what we can do with a Debit card which is generally offered by the Indian Banks.
Advantages of Debit Card
Today you can withdraw cash without using any physical debit card. SBI, India’s largest Bank may replace their debit card with Mobile Banking Apps, SBI Yono where you can withdraw cash in SBI ATM without using any Physical card, by generating a Token called Yono Cash. The primary purpose of issuance debit cards in India is to Cash Withdrawal at ATM. But in this era of digital banking, this concept will likely get obsolete soon. A Debit Card can be used for many other banking related works including the traditional cash withdrawal system.
Here’s is some top advantages of Debit Card in India
- Emergency Cash Requirement: A physical debit card can be used for emergency cash requirements. You can find ATM of any Bank at every place. Therefore, you do not need to carry cash all the time.
- Less Risky: Carrying Cash all the time is a very risky affair, a debit card is a more convenient solution with holding a high amount of cash. A debit card is very easy to carry and manage without taking too much risk.
- Not Affecting Credit Score: Debit Card is a prepaid card where your linked account will be debited if you withdraw cash or use it in any online purchase, whereas a credit card is a kind of debt, your spending on credit card will affect your personal credit ratings score like CIBIL or CRIF. A high credit outstanding in your credit card account may negatively affect your CIBIL Score.
- Activation of Mobile Banking & Internet Banking: You can register for mobile banking apps or activate your NetBanking by your Debit Card Number and Personal Identification Number (PIN) in many banks.
- Activation of MPIN of UPI: You can activate your UPI MPIN by debit card number and PIN. If you use BHIM, Google Pay or any other UPI Payment App, you need a debit card to create MPIN.
- Personal Accidental Insurance: Many banks offer free personal Accidental Accidental Insurance up to Rs.20.00 Lacs with to the Debit Cardholders.
- Less Spending: As debit card primarily linked with your bank account and your savings account will get debited if you use the debit card. Therefore, no overdrawing is allowed if you use the debit card. This will intern help us to curb our overspending habits.
- Airport VIP Lounge Access: You can get almost free Airport’s VIP Lounge with your Visa/Mastercard or even if you have a Rupay Platinum International Debit card.
- Worldwide Acceptance: You can withdraw money in any ATM in any currency in any country using your Debit Card, no matter your Debit card is Visa/Mastercard or even a Rupay card. I have already written a detailed article on how to enable Rupay Card for international payments.
- Discounts and Cashback offer: You can get numerous cashback or discount facilities on different eCommerce websites like Amazon or Flipkart. Some banks’ debit cards also offer EMI facilities on debit cards nowadays which was only possible on credit cards previously.
- Rewards Points: You can accumulate Rewards points with every spending using the debit card. These accumulated rewards points can be redeemed to several online stores.
- Metro Smart Card: You can use some types of debit cards as Metro Smart Card in some metropolitan cities in India.
Types of Debit Cards in India
There are different types of debit cards generally offer by the Indian commercial banks. The main features of all the debit cards are the same, the difference in payment networks system these cards are using.
These are the different types of Debit cards in India you can obtain from the Indian banks or any Fintech Company.
1.# Visa Debit Card
Visa is a globally accepted Payment network and most popular types of debit cards in India. Some Private Banks like ICICI Bank only provide Visa based debit cards except Basic savings Account Holders (PMJDY). Visa is an international payment network, you can withdraw cash at any ATM across the world, though your Visa debit cards need to be International transaction enabled to withdraw funds in overseas countries.
As Visa is a USA based payment network system, all the transactions settled in USD and the transaction fee is also very high in comparison to our own payment system Rupay. The Indian banks have to pay heavy transaction settlement fees to Visa, though the banks collect these transaction fees along with the service charges from the merchant accounts. This fee is called Merchant Discount Rate or MDR. Though the Govt of India has recently proposed for “Zero MDR” to accelerate the Digital payment system in India.
There are various types of premium and regular Visa powered debit cards offered by commercial banks in India with some add on services like perks, rewards, cashback offers or high withdrawal limits, etc. Some of the Visa Debit card variants are Visa Gold Debit cards, Visa Platinum International Debit Cards, Visa Signature Debit Card, Visa Signature Debit card, etc.
2.# Mastercard Debit Cards
Another globally accepted and feature riched Debit card and close competitor of Visa Debit card, though not as popular as Visa based debit card in India (Mastercard is more popular for Credit cards section rather than the debit card). Mastercard is one of the oldest and most secure payment networks in the World. You can withdraw cash or make payments online anywhere in the world using your Mastercard Debit card.
Mastercard Debit card is a premium type of debit card and only a few PSU & Private banks provide Mastercard Debit card to its customers. Some popular variants of Mastercard Debit card are World Debit Mastercard, Titanium Debit Card, Platinum Debit Mastercard, Gold Debit Mastercard, etc.
There has not so much difference Visa and Mastercard, both are payment processing companies. They do not issue cards itself, the cards are issued by the banks. The difference in the rewards program, offers or discounts depends on the card-issuing banks. The card-issuing banks tying up with payment service providers issue debit or credit cards to their customers. Mastercard has excellent customer support and resolves queries related to debit cards 24×7 basis.
3. # Maestro Debit Card
Maestro is a global payment processing brand originally owned by Mastercard. You can use the Maestro debit card at any ATM or PoS terminal or purchase items online anywhere from the world. Maestro card is mostly issued by the PSU banks in India and very popular amongst the State Bank of India, Punjab National Bank, and Oriental Bank of Commerce due to its low transaction processing charges.
As Maestro card is a part of the Mastercard payment network, the policies and rules are governed by the Mastercard and many countries it is regarded as Mastercard. You can withdraw cash in any ATM where you will find the Mastercard Logo.
4.# RuPay Debit Card
Rupay debit card is the Indian version of popular international debit card providers like Visa, Mastercard, launched by NPCI in the year 2012. You can get all the features and benefits on par with popular international brands like Visa or Mastercard. You can get 2 Airport Lounge access per quarter and this is not restricted to only Indian airports if you use the Platinum International Debit card. The number of international lounge access is almost the same as offered by the DinnerClub.
You can use the Rupay Debit card at any PoS terminal in India, purchase items in all eCommerce websites in India and withdraw cash at any ATM in India. You can even use your Rupay Debit card for international payments as well as withdraw cash at any ATM across the world if you are visiting abroad. I have written a detailed article on that, you may the article here.
You may get RuPay debit card automatically if you open a savings account in any PSU banks, even many Private sector banks also offer RuPay Debit Card, because transaction fees of RuPay are very low as compared to Visa or Mastercard. Therefore, the card renewal fees of RuPay based debit card is also very low.
Rupay cards also have some exclusive cashback and discount offers on many eCommerce websites like Amazon, Flipkart, BookmyShow etc during the festival seasons or any other normal time.
Some of the popular RuPay Debit Card in India are Rupay Platinum International Debit Card, Rupay Global Debit Card, RuPay PMJDY Card, etc.
5.# Visa Electron Debit Cards
As the name, reveals itself Visa Electron Debit Cards is a sister concern of Visa and uses the Visa payment gateway network to process the transaction. Though not very popular in India, many PSU banks and some of the Private banks still provide Visa Electron Debit Cards to its customers, because the payment processing charges are lower than the Visa Debit card.
One of the most important features of Visa Electron Cards is that the card can not be used for overdrawing facilities, ie debit balance of your account will not be possible in Visa Electron Card linked account. Therefore, the chances of overspending are minimum. You can only use Visa Electron Debit cards up to a certain upper limit for the transaction. State Bank of India was previously used to provide Visa Electron Debit Cards to its customers but after the launch of Rupay payment gateway, most of the banks now provide RuPay based debit cards to its regular customers.
You can withdraw fund or use it any PoS terminal anywhere in the world if you have a Visa Electron card because it uses the Visa payment network to process the transaction.
6.# Contactless Debit Cards
As the name says itself there will not be any physical contact between the cards and PoS terminal to process any transaction. Though contactless cards are already very popular in many western & Asian countries, the usage of contactless cards has been getting momentum in India after the RBI made the chip-based card mandatory since January 1, 2019.
Contactless Debit cards process the cash transaction 60% faster than the regular EMV based debit cards and it can be both online and offline. A metro smart card is also a kind of contactless debit card.
The contactless card uses the NFC (Near Field Communication) technology to communicate between the two NFC enabled devices. The Ministry of Finance also asks banks to provide more contactless debit or credit cards to its customers.
As per RBI guidelines, you do not have to provide PIN or signature for contactless payments in PoS terminals up to Rs.2000.00.
Visa, Mastercard, and Rupay are the three main payment processing providers for the contactless debit card issuer banks. The contactless technology of Visa is called “Visa PayWave” and Mastercard is called “Tap & Go”.
I have already written a detailed article on the best contactless cards in India. You can read the article here
7.# Virtual Debit Cards
In Virtual Debit Cards, you will not get any physical debit card, instead, you will get a Virtual or Digital form of debit card. The Virtual Debit card has its own unique card numbers, CVV and Expiry Date. You can use Virtual Debit cards for any type of online transaction in India or abroad depending upon the card-issuing banks. The Virtual Debit card may be Visa, Mastercard or Rupay based. You can not use the virtual Debit card for Cash Withdrawal.
Virtual Debit Card is completely free of cost, though you have pay charges if you request for Physical Debit Cards. I have already written some articles on virtual debit cards and Digital banks in India. You can read the article here
- How to create a free virtual debit card in India for international transaction
- Best Virtual Debit cards in India
- Best Digital Bank Accounts in India
You can get a physical debit card from any Indian banks if the mode of operation of the Current Account is single. If you have a Current Account in the name of Firm and you are the Sole Proprietors of the Account, then you can also get a Debit card in the name of your Firm. The card withdrawal limits depend on the types of debit cards and the card-issuing banks
The debit card is one of the most important digital payment methods in India. The debit cards are not only meant for cash withdrawal now. Some banks like SBI may stop issuing debit cards soon, but a debit card was the first instrument introduced by the banking industry for making the system towards the path of digitalization. Still, for most of the common Indian, a physical debit card is a lifesaver during the time of emergency cash requirements.
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