Small Business

What You Need to Know About Online Debit Cards

Posted on: December 5, 2009

Online debit cards are actually not new. Many people may already be using these cards without actually realizing it. Essentially, an online debit card can work like any other credit or debit card. You can use it to pay for your airline tickets, purchases on shopping malls and restaurants, and even for online transactions. What distinguishes this debit card from other types of debit cards is how the transaction is treated or processed. Once you use your online debit card, the purchases that you made are instantaneously deducted from your savings or checking account. Thus, when you use this particular card, it is like you are paying in cash. Do not think, however, that the word online in this type of debit card limits your transaction over the Net. It is a common misconception that this payment option is only for Internet use.

Since majority of online debit cards carry the logo of a major credit card provider, such as Visa or Visa Electron, you will really have no problem using this type of card. This payment instrument is also known as PIN debit, primarily because each transaction made with this particular debit card needs an electronic verification or authentication at the point of sale. Thus, if your debit card requires you to type your ATM PIN number on a small gadget, you are most likely using an online debit card.

Merchants or retailers actually prefer online debit cards rather than other types of plastic payments. First, they pay significantly lower fees when accepting online debit card payments compared to other card payment options. This can mean a lot of savings for retailers especially if they have a lot of transactions each day. Moreover, transactions are usually faster for online debit cards. Once the holder has entered the PIN number and the bank has verified the transaction, the sale is completed. With credit cards and signature debit cards, there are many billing and paper works that are needed to consummate the sale.

Finally, many perceive online debit cards as superior when it comes to safety over other types of card options. For one, thieves can easily copy the signature on the back panel of the credit or offline cards. So, when your credit card falls in the wrong hands, you are in big trouble. PIN debit cards are much harder to hack or use illegally. Even if an unscrupulous individual gets hold of your online debit card, if he is unable to guess your PIN number, the card is virtually useless.

For further information on online debit cards or to apply for one, please visit


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