Editing Debit card (section)

==Types of debit card systems==
[[Image:CCardFront.svg|thumb|right|225px|An example of the front of a typical debit card:
{{ordered list
| Issuing bank logo
| [[EMV|EMV chip]] (optional and may depend on the issuing institution or bank)
| [[Hologram]] (this is located on the back on some cards, including most MasterCards)
| [[Payment card number|Card number (PAN)]] (may vary in length but mostly 16-digits with unique last 4 digits. However in cases such as Discover, Diner's Club, UnionPay & American Express it has a unique 15-digit card number)
| Card brand logo
| Expiration date
| Cardholder's name
}}]]
[[Image:CCardBack.svg|thumb|right|225px|An example of the reverse side of a typical debit card:
{{ordered list
| [[Magnetic stripe#Financial cards|Magnetic stripe]]
| [[Signature]] strip panel
| [[Card Security Code]]
}}]]

There are currently three ways that debit card transactions are processed: '''[[EFTPOS]]''' (also known as ''online debit'' or ''PIN debit''), '''offline debit''' (also known as ''signature debit''), and the '''Electronic Purse Card System'''. One physical card can include the functions of all three types, so it can be used in a number of different circumstances.
The five major debit card networks are [[UnionPay]], [[American Express]], [[Discover Card|Discover]], [[Mastercard]], and [[Visa Inc.|Visa]]. Other card networks are [[STAR (interbank network)|STAR]], [[JCB (credit card company)|JCB]], [[Pulse (interbank network)|Pulse]], etc. There are many types of debit cards, each accepted only within a particular country or region; for example, [[Switch (debit card)|Switch]] (since merged with Maestro) and [[Solo (debit card)|Solo]] in the United Kingdom; [[Interac]] in Canada; [[Carte Bleue]] in France; [[Electronic cash|EC electronic cash]] (formerly [[Eurocheque]]) in Germany; [[Bancomat (debit card)|Bancomat/PagoBancomat]] in Italy; [[UnionPay]] in China; [[RuPay]] in India; and EFTPOS cards in Australia and New Zealand. The need for [[Single Euro Payments Area|cross-border compatibility]] and the advent of the [[euro]] recently led{{dubious|date=September 2021}} to many of these card networks (such as Switzerland's "EC direkt", Austria's "Bankomatkasse", and [[Switch (debit card)|Switch]] in the United Kingdom) being re-branded with the internationally recognized [[Maestro (debit card)|Maestro]] logo, which is part of the Mastercard brand. Some debit cards are dual-branded with the logo of the (former) national card as well as [[Maestro (debit card)|Maestro]] (for example, EC cards in Germany, Switch and Solo in the UK,{{dubious|date=September 2021}} Pinpas cards in the Netherlands, Bancontact cards in Belgium, etc.). The use of a debit card system allows operators to package their products more effectively while monitoring customer spending.

===Online debit system===
Online debit cards require electronic authorization of every transaction, and the debits are reflected in the user's account immediately.<ref name=XferAlmostImmed/><ref name=DeLuxLarger/><ref name=DebLawNYT>{{cite news
|newspaper=[[The New York Times]]
|url=https://archive.nytimes.com/roomfordebate.blogs.nytimes.com/2009/09/08/the-debit-card-trap-or-sound-choice/
|title=The Debit Card: Trap or Sound Choice?
|author=Elaine Thompson
|date=September 8, 2009
|access-date=July 28, 2022
|archive-date=July 28, 2022
|archive-url=https://web.archive.org/web/20220728180408/https://archive.nytimes.com/roomfordebate.blogs.nytimes.com/2009/09/08/the-debit-card-trap-or-sound-choice/
|url-status=live
}}</ref> The transaction may be additionally secured with the [[personal identification number]] (PIN) [[authentication]] system; some online cards require such authentication for every transaction, essentially becoming enhanced [[automatic teller machine]] [[ATM card|(ATM) cards]].

One difficulty with using online debit cards is the necessity of an electronic authorization device at the [[point of sale]] (POS) and sometimes also a separate [[PINpad]] to enter the PIN, although this is becoming commonplace for all card transactions in many countries.

Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing [[Latency (engineering)|lag]] on transactions that may only issue online debit cards. Some online debit systems are using the normal authentication processes of Internet banking to provide real-time online debit transactions.

===Offline debit system===
Offline debit cards have the [[logo]]s of major credit cards (for example, [[Visa Inc.|Visa]]<ref name=":0" /> or [[Mastercard]]). These cards connect straight to a person's bank account, but there is a delay before the money is taken out.

===Electronic purse card system===
[[Smart card|Smart-card]]-based electronic purse systems (in which value is stored on the card chip, not in an externally recorded account, so that machines accepting the card need no network connectivity) have been in use throughout Europe since the mid-1990s, most notably in Germany ([[Geldkarte]]), Austria ([[Quick Wertkarte]]), the Netherlands ([[Chipknip]]), Belgium ([[Proton (bank card)|Proton]]), Switzerland (CASH), and France ([[Moneo]], which is usually carried by a debit card). In Austria and Germany, almost all current bank cards now include electronic purses, whereas the electronic purse has been recently phased out in the Netherlands.

===Prepaid debit cards===

====Nomenclature====
Prepaid debit cards are reloadable and can also be called reloadable or rechargeable debit cards.

====Users====
The primary market for prepaid debit cards has historically been [[unbanked]] people;<ref>{{cite web
|title=Pepper Prepaid Preport Extract
|url=http://www.polymathconsulting.com/images/uploaded/Pepper%20Prepaid%20Report%20Extract.pdf
|publisher=PEPPER |access-date=April 9, 2012
|archive-url=https://web.archive.org/web/20120130234425/http://www.polymathconsulting.com/images/uploaded/Pepper%20Prepaid%20Report%20Extract.pdf
|archive-date=January 30, 2012
|url-status=dead}}</ref> that is, people who do not use banks or credit unions for their financial transactions.<ref>{{cite web |last=Perine |first=Martha |url=http://www.stlouisfed.org/publications/cb/articles/?id=2039 |title=Reaching the Unbanked and Underbanked |publisher=Stlouisfed.org |access-date=December 30, 2012 |archive-date=November 3, 2013 |archive-url=https://web.archive.org/web/20131103004513/http://www.stlouisfed.org/publications/cb/articles/?id=2039 |url-status=dead }}</ref>

====Advantages====
Advantages of prepaid debit cards include being safer than carrying cash, worldwide acceptance, not having to worry about paying a credit card bill or going into debt, the opportunity for anyone over the age of 18 to apply and be accepted without checks on creditworthiness, and the option to deposit paychecks and government benefits directly onto the card for free.<ref>{{cite web
|author=CreditCards.com
|url=http://www.creditcards.com/credit-card-news/prepaid-debit-card-benefits-1271.php
|title=Prepaid debit card benefits and disadvantages
|publisher=Creditcards.com
|date=March 22, 2006
|access-date=December 30, 2012
|archive-date=September 29, 2018
|archive-url=https://web.archive.org/web/20180929155536/https://www.creditcards.com/credit-card-news/prepaid-debit-card-benefits-1271.php
|url-status=dead
}}</ref> A newer advantage is the use of [[EMV]] technology and even contactless functionality, which had previously been limited to bank debit cards and credit cards.

====Risks====
* If the card provider offers an insecure website for the cardholder to check the balance on the card, this could give an attacker access to the card information.
* If the user loses the card and has not somehow registered it, they will likely lose the money.
* If a provider has technical issues, the money might not be accessible when a user needs it. Some companies' payment systems do not appear to accept prepaid debit cards.<ref>{{Cite web |last=Zagorsky |first=Jay L. |date=2024-01-22 |title='No cash accepted' signs are bad news for millions of unbanked Americans |url=http://theconversation.com/no-cash-accepted-signs-are-bad-news-for-millions-of-unbanked-americans-221393 |access-date=2024-07-04 |website=The Conversation |language=en-US}}</ref>

====Types====
Prepaid cards vary by the issuer company: key and niche financial players (sometimes collaborations between businesses); purpose of usage (transit card, beauty gift cards, travel card, health savings card, business, insurance, etc.); and regions.

====Governments====
As of 2013, several city governments (including [[Oakland, California]],<ref>{{cite web|url=http://consumerist.com/2013/03/20/oakland-residents-will-be-slammed-with-fees-if-they-use-city-ids-as-debit-cards/|title=Oakland Residents Will Be Slammed With Fees If They Use City IDs As Debit Cards|work=Consumerist|date=20 March 2013|access-date=11 April 2013|archive-date=28 April 2013|archive-url=https://web.archive.org/web/20130428081850/http://consumerist.com/2013/03/20/oakland-residents-will-be-slammed-with-fees-if-they-use-city-ids-as-debit-cards/|url-status=live}}</ref> and [[Chicago]], [[Illinois]]<ref>{{cite web|url=http://consumerist.com/2013/03/21/chicago-transit-prepaid-debit-cards-also-fully-loaded-with-fees/|title=Chicago Transit Prepaid Debit Cards Also Fully Loaded With Fees|work=Consumerist|date=21 March 2013|access-date=11 April 2013|archive-date=26 March 2013|archive-url=https://web.archive.org/web/20130326233859/http://consumerist.com/2013/03/21/chicago-transit-prepaid-debit-cards-also-fully-loaded-with-fees/|url-status=live}}</ref>) are now offering prepaid debit cards, either as part of a municipal ID card (for people such as [[illegal immigration|illegal immigrants]] who are unable to obtain a state [[driver's license]] or DMV ID card) in the case of Oakland or in conjunction with a prepaid transit pass (in Chicago). These cards have been heavily criticized<ref>{{cite web|url=http://consumerist.com/2013/04/09/oakland-decides-it-doesnt-need-all-those-fees-on-its-combination-iddebit-cards/|title=Oakland Decides It Doesn't Need All Those Fees On Its Combination ID/Debit Cards – Consumerist|work=Consumerist|date=9 April 2013|access-date=11 April 2013|archive-date=15 April 2013|archive-url=https://web.archive.org/web/20130415045221/http://consumerist.com/2013/04/09/oakland-decides-it-doesnt-need-all-those-fees-on-its-combination-iddebit-cards/|url-status=live}}</ref><ref>{{cite web|url=http://defendyourdollars.org/posts/2645-city-of-oakland-takes-a-step-in-right-direction|title=City Of Oakland Takes A Step In Right Direction|work=Defend Your Dollars|access-date=2013-04-11|archive-date=2015-12-08|archive-url=https://web.archive.org/web/20151208063141/http://defendyourdollars.org/posts/2645-city-of-oakland-takes-a-step-in-right-direction|url-status=dead}}</ref> for their higher-than-average fees, such as excessive flat fees added onto every purchase made with the card.

The U.S. federal government uses prepaid debit cards to make benefit payments to people who do not have bank accounts.<ref>[http://bankcreditnews.com/news/federal-government-chooses-direct-deposit-and-prepaid-cards-over-mailing-checks/9413/ “Federal government chooses direct deposit and prepaid cards over mailing checks”] {{webarchive|url=https://web.archive.org/web/20130423044908/http://bankcreditnews.com/news/federal-government-chooses-direct-deposit-and-prepaid-cards-over-mailing-checks/9413/ |date=2013-04-23 }}, BankCreditNews, 15 Apr 2013, Accessed 2013-04-22.</ref>

In July 2013, the [[Association of Government Accountants]] released a report on government use of prepaid cards, concluding that such programs offer a number of advantages to governments and those who receive payments on a prepaid card rather than by check. The prepaid card programs benefit payments largely for the cost savings they offer and provide easier access to cash for recipients, as well as increased security. The report also advises that governments should consider replacing any remaining [[cheque]]-based payments with prepaid card programs in order to realize substantial savings for taxpayers as well as benefits for payees.<ref>{{cite web |url=http://bankcreditnews.com/news/aga-report-finds-government-prepaid-cards-offer-numerous-advantages/11472/ |archive-url=https://web.archive.org/web/20130722053001/http://bankcreditnews.com/news/aga-report-finds-government-prepaid-cards-offer-numerous-advantages/11472/ |url-status=dead |archive-date=July 22, 2013 |title=AGA report finds government prepaid cards offer numerous advantages |date=July 12, 2013 |publisher=Bank Credit News |access-date=2013-07-18 }}</ref>

====Impact of government-mandated fee-free bank accounts====
In January 2016, the UK government introduced a requirement for banks to offer fee-free basic bank accounts for all, which had a significant impact on the prepaid industry, including the departure of a number of firms.<ref>{{cite web
   |title=Fee-Free Basic Bank Accounts Launched
   |url=https://www.gov.uk/government/news/fee-free-bank-accounts-launched
   |access-date=2016-09-23
   |archive-date=2019-07-23
   |archive-url=https://web.archive.org/web/20190723174045/https://www.gov.uk/government/news/fee-free-bank-accounts-launched
   |url-status=live
   }}</ref>