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How Does a Debit Card Work?



debit card

If you’re sick and tired of carrying cash around, a debit card is what you need. Be it online or offline payment, with a debit card in your pocket, you can breeze through transactions without having to count through wads of cash.

Today, almost all of us have a debit card in our purses or wallets. But have you ever stopped and considered how these flat, three-inch plastic cards work?

Whether you have or haven’t, let’s take an in-depth look into the workings of a debit card.

How Does a Debit Card work?

You can use a debit card for various transactions – offline, online, and EMI-based payments. Here’s how they work in each instance.

Offline Transactions

To make an offline transaction, you’ll have to swipe your card in a POS machine. Typically, the process goes like this:

  • The merchant swipes or inserts your card into the machine
  • Once the machine identifies your card, the merchant enters the transaction amount
  • After that, you enter the 4-digit PIN to authorise the payment
  • Your debit card has a small chip embedded into the plastic, akin to a phone SIM card. This chip communicates with the bank servers, alerting them of a transaction
  • The bank then deducts the payment amount from your account and transfers it to the account registered on the POS machine
  • Upon successful payment, the machine prints a receipt of the transaction

Online Transactions

For making online payments using a debit card, you typically need to enter the sixteen-digit card number, the expiry date, and the three-digit CVV number present at the back of your credit card. A transaction request is sent to the bank’s server and an OTP (one-time password) to your registered phone number. Once you authorise the transaction using the OTP, the transaction is processed, and the amount is deducted from your bank account.

EMI on Debit Card Transactions

If you’ve ever wondered, ‘Can we do EMI with debit card,’ the answer is yes!

Unlike credit card EMIs, there’s no credit involved in debit card EMIs. When you opt for debit card EMI, the entire purchase amount is first deducted from your bank account. After a few days, the purchase amount minus the first EMI is credited back into your account. Hence, you can’t opt for debit card EMI if you have an insufficient balance in your account.

However, some online shopping websites, such as Amazon, feature EMI on debit card facilities where the entire purchase amount isn’t deducted from your bank account. It works through a pre-approved overdraft facility.

Plus, debit card EMI isn’t available to everyone. You have to fulfil your bank’s debit card eligibility criteria first to qualify for an instalment facility.

Today, many banks like IndusInd Bank offer debit card EMI facilities. This means you can make a purchase using a debit card up to a predetermined limit and pay the cost in instalments later. You also have access to flexible repayment tenures with IndusInd Bank’s debit card EMI. This makes it a viable payment option, especially if you can’t afford a lump sum payment.

Final Word

From offline to online transactions, debit cards are undoubtedly a convenient option for cashless transactions. Moreover, with the EMI on debit card feature, it is now easy to divide up your spending into manageable chunks, allowing you to keep your savings intact.

If you’re looking to opt for a debit card EMI, check your debit card eligibility on your bank’s website today!


Also check:

Bank of America Edd | Debit Card | California EDD –

Best Cryptocurrency Exchanges That Accept Debit Card or Credit Card

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