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Debit cards in India
Find out how debit cards can work for you and how to choose the best one.
Debit cards let you spend the money you have in your bank account. When you apply for a current account, you will receive a debit card so that you can make purchases in stores and online.
Debit cards in India come with a few features and fees you should be aware of, so take a look at the guide below to find out what you need to know.
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What exactly is a debit card?
A debit card comes linked to your current account and lets you spend the money held in your account. Unlike a credit card, you will only be able to spend the money you have available. You can use a debit card in a physical store as well as online. Many debit cards in India are now contactless-enabled, meaning you can simply tap your card on the payment terminal to make your purchase.
What features do debit cards have in India?
There are a few useful features with debit cards in India that can make spending easy. Here are some features to look out for:
- Use your card globally. Most debit cards can be used for both local and overseas transactions. Keep an eye on fees for international spending though.
- Spend online. Use your card for online purchases, just like a credit card.
- Mobile payments. Add your debit card to Apple Pay or Google Pay and spend using your smartphone. It works the same as contactless payment.
- Contactless payments. For purchases under Rs.2000, you can simply tap your debit card on the payment terminal to make a purchase with no need to enter your PIN. Make sure to check if your bank charges you for contactless purchases.
- Access an overdraft. While debit cards typically only let you spend what’s in your bank account, some bank accounts come with an overdraft allowance to let you spend over that amount. You will then be required to pay the amount back plus interest and fees.
- Purchase protection with chargeback. If you buy something with your debit card and it is faulty, damaged or not as described, you can apply to receive the purchase amount back through a chargeback.
- Secure spending and emergency cash. Some banks allow you to ‘freeze’ your debit card so it cannot be used if it’s lost or stolen. Plus, you may be able to access emergency cash through your debit card if you’re stranded abroad.
Types of debit cards in India
Here are the most common types of debit cards in India:
Visa debit cards
Visa debit cards are issued by banks that have tied up with the Visa Payment System network and can be used anywhere in the world where Visa is accepted.
Depending on the financial institution, you may be able to choose from a wide range of Visa debit card options (e.g. Visa Classic Debit Card, Visa Platinum Debit Card, Visa Signature Debit Card etc.) – each with varying features and perks.
When paying for an online purchase, the transactions are processed through the secure Verified by Visa payment platform.
Mastercard debit cards
Like Visa, Mastercard is one of the world’s largest payment card network processors. With a Mastercard debit card, you can pay electronically at over 38 million merchants across 210+ countries.
When making an online transaction, you’ll enjoy an additional layer of security with the Mastercard SecureCode service, which delivers a one-time password/PIN (OTP) via SMS for transaction approval.
The three most popular debit card options issued by Mastercard are the standard debit card, the enhanced debit card and the World Debit Mastercard. Additionally, Mastercard also offers a wide array of benefits and a rewards programme.
RuPay debit cards
Introduced by the National Payment Corporation of India (NPCI) in 2012, RuPay is a domestic card scheme with low transaction costs and easy availability.
RuPay debit cards are issued by more than 1,100 banks and can be used for ATM withdrawals, online transactions, and card payments.
However, do note that RuPay cards (except RuPay Global card) are only accepted domestically and cannot be used for international level transactions or abroad.
Visa Electron debit cards
Visa Electron debit cards are similar to Visa debit cards, with the exception of an overdraft facility to prevent overspending.
This means that all funds are to be available at the time of the transaction. If the POS terminal is unable to determine if you have sufficient funds in real-time (for example, during flights or trains), your transaction will not be able to go through.
Other than a few limitations, the Visa Electron debit cards can be used for online or POS payments, as well as cash withdrawals at both domestic and international ATMs.
Contactless debit cards
Contactless debit cards come with a small embedded chip that utilises Near Field Technology (NFC) or RFID (Radio Frequency Identification) for secure connection to PoS terminals, allowing quicker payments with just a tap or wave instead of swiping.
Most Visa, Mastercard and RuPay debit cards issued nowadays are contactless-enabled.
Maestro debit card
Maestro is a globally accepted debit card service owned by Mastercard. They can be used for in-store and online payments, as well as cash withdrawals at compatible ATMs across the world.
Which type of debit card should you choose?
While there are several types of debit cards available, most of them are somewhat similar — with slight variations in features, fees, perks and reward programmes.
Before applying, be sure to compare your options, understand what each card offers and choose one that best suits your needs.
What fees or charges apply to debit card spending?
Just like with your current account, there are a few fees, charges and limits to be aware of with your debit card. All of these differ between banks so make sure you check what applies to your card.
- ATM withdrawal limits. Each bank sets a limit for how much you can withdraw from ATMs each day. This limit will typically be between Rs.25,000 and Rs.50,000.
- ATM transaction fees. Depending on your bank, you’re typically entitled to three free ATM transactions each month and subsequent ATM transactions will incur a fee (capped at Rs. 20 per transaction).
- Contactless spending. Some Indian banks will charge you for each contactless purchase you make. There is also a limit of Rs.2000 per contactless transaction.
- Spending abroad. You will likely be charged when spending in other currencies. These charges can include a currency exchange fee for purchases and ATM withdrawals as well as additional fees for withdrawing cash abroad.
What will happen if I accidentally spend more money on my debit card than I have in my current account?
This really depends on whether or not you have arranged an overdraft facility with your bank.
An arranged overdraft allows you to borrow a certain amount of money from the bank when you have no money left and your balance is zero. You will usually have to pay interest when you do use your overdraft but your bank should alert you to any charges before the amount is debited from your account. It’s important to try and avoid going overdrawn on your account
If you don’t have an arranged overdraft on your account and you spend more than you have, you may fall into an unarranged overdraft, where the bank is likely to charge you interest on the money it loans you and possibly even a daily fee until you pay it back. The bank may also refuse to process a payment that would take your account into a negative balance, and this could lead to a fee each time it has to refuse payment.
For this reason, it’s important to always ensure you have enough money in your account for recurring payments, such as your phone bill, as if the issuer tries to deduct the money from your account and it’s empty, you will likely be charged a penalty. You could also face problems with your phone company for a delayed or missed payment.
How secure is spending with a debit card?
Spending with a debit card is essentially as secure as spending with a credit card. Here are some of the security features you’ll have:
A PIN (personal identification number) allows you to securely spend money held in your bank account using your debit card. When you sign up for a bank account and receive your debit card, you should receive instructions on how to set your PIN. This may be done online through your Internet banking portal or through a banking app.
Keep your PIN to yourself and do not share it with anyone, this will help ensure your funds remain secure. If you forget your PIN or need to change it, you can contact your bank directly.
What is the Green PIN?
The GREEN PIN is an instant and effortless PIN generation facility for debit card customers. Through this feature, customers can easily setup or reset their ATM PIN with a One Time Password (OTP) sent to their registered mobile number.
The Card Verification Value (CVV) is a three-digit number found on the back of your debit card. On American Express debit cards, the CVV is four digits. This number is used to verify your debit card and helps to reduce fraud, by proving to the merchant that you have the physical debit card with you when making a purchase online or over the phone.
Freeze your card
If your card is lost or stolen, many banks have a ‘freeze’ feature that lets you stop your card from being used. If you find your card you can ‘unfreeze’ it again, or you can order a new card from your bank.
Banks monitor your spending and can alert you if a transaction looks suspicious. Visa and Mastercard also have their own programmes to monitor your spending and flag fraudulent transactions.
Can I get a refund on fraudulent transactions?
This depends on your bank and the situation. You may be able to request a refund on fraudulent transactions if you can supply evidence or comply with the bank’s conditions. For more information, speak to your financial institution.
Prepaid cards vs debit cards vs credit cards: What’s the difference?
There are three main types of spending cards in India: prepaid cards, debit cards and credit cards. Each comes with a specific set of features and charges and each suit different types of needs.
Prepaid cards are cards that are not linked to a bank account, and only let you spend the amount you load into the card. Some digital banks which do not have banking licences yet function as prepaid cards. Debit cards are different as they let you spend any amount in your bank account, including an overdraft if that is available to you. Credit cards are different again as they let you spend borrowed money up to a pre-determined credit limit. You then repay this money with interest.
Credit cards are the only care type that will charge you interest for spending, but all three types of cards come with certain fees and rates for spending.
What are the advantages of using a debit card?
- You have easy access to cash. Your debit card allows you to withdraw money from your account without having to go into a bank branch.
- You can make purchases overseas or at local shops. With a debit card you don’t need to carry cash in order to make purchases and can make contactless payments for purchases Rs.2000 or less.
- You can shop online. If your debit card has a credit card logo, you can use it to make purchases online.
What are the drawbacks of using a debit card?
- Associated fees. Read the terms and conditions carefully to discover if your bank charges fees for the current account your debit card is attached to.
- ATM withdrawal charges. Depending on the bank, you could be charged a fee each time you withdraw cash.
- You have to use an ATM in your network. Banks have their own network of ATMs and using your debit card outside of the network could result in added charges to your account.
- Daily withdrawal limits. Depending on the bank, you’ll be able to withdraw a certain amount of money each day. Beyond this amount, you might need to request a larger sum of money by speaking to the bank directly.
- Daily spending limits. Each bank in India will set its own daily spending limits and once you’ve reached the limit, you won’t be able to spend any more.
- Non-INR payment charges. You’ll typically be charged a currency conversion fee by your bank when you make payments that are not in Rupees.
How do I get a debit card?
To get a debit card, you’ll first need a savings/current account. Once you apply for and open a bank account in India, you will be sent a debit card.
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