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Saturday, July 10, 1999
Debit cards -- The new way to shop
Swati Prasad
NEW DELHI, JULY 9: For those who are scared of taking credit and find little time to operate their accounts, debit cards are the safest bet to ensure that they don't spend beyond their budgets. Citibank launched a debit card in Delhi and Mumbai yesterday, after testing it for over six months in Bangalore. TimesBank has issued debit cards to its account holders and these will become operational next month.Both the cards are brought out by MasterCard and carry its Maestro logo. A debit card is essentially a deposit access programme whereby an account holder can access money from his/her savings or current account at the point of purchase of a good or service as well as from ATMs to withdraw cash. The advantage of a debit card is that the money stays in the bank until the transaction takes place. So there is interest to be earned till the moment the money is actually spent. According to Vivek Kumar, director of Member Relations and Marketing, MasterCard International, few more banks would would soon beannouncing their Maestro debit card programmes. Maestro cards can be used at 146 MasterCard/Cirrus network ATMs in 16 cities in India as of now. ``Soon we are going to extend this facility to 180 ATMs in 25 cities,'' says Kumar. So irrespective of which Maestro debit card you have, you have access to cash at these MasterCard network ATMs. There are over 250 million Maestro cards worldwide. HOW A DEBIT CARD WORKS The card holder presents the debit card to the salesperson at outlets which honour the card. The salesperson swipes the card on the electronic draft capture or EDC machine.
The card holder is connected directly to the account.
The account holder has to press 1 for savings account, 2 for current/checking account and 3 for credit.
After this, the account holder has to enter the ATM-PIN on the pin-pad. The salesperson enters the amount that is to be debited from the account of the card holder. The merchandise establishment receives a creditfor the purchase.On an EDC terminal, a card holder can do a sale transaction on a debit card; do a balance inquiry or a refund transaction on a debit card; besides the regular transactions on a credit card. THE FINEPRINT For a transaction on a debit card, only a code or an ATM-PIN is required. A signature is not. So if your progeny or spouse knows the code, grabs your card and decides to go on a binge, you've had it!
Debit cards, of course, come with a minimum balance limit. In the case of a TimesBank debit card, according to a company official, the account holder needs to maintain a balance of Rs 10,000. If the balance goes below that, the bank charges Rs 100 per month as penalty. The bank's ATM facility will become operational from July 10.Citibank believes in relationship banking. So the various accounts, fixed deposits etc of you and your family with the Citibank should be above Rs 3 lakh. A Citibank debit card can be used at 2,000 merchandise establishments inMumbai, Delhi and Bangalore. TimesBank has tied up with 500 merchandise outlets in Delhi and 2,000 in Bangalore. According to the TimesBank official, the bank plans to increase the number of outlets in Delhi to 5,000 within the next two years.MasterCard is very optimistic about the growth of debit cards. According to Kumar of MasterCard, ``debit cards will account for the single largest number of payment-card transactions worldwide by 2005.'' But worldwide, people carry both a debit and a credit card. ``Debit cards act as a substitute to cash and cheques,'' he adds. Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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