Debit cards are plastic payment cards that can be used instead of money. The debit card allows the user to withdraw money from their bank account through an ATM or through the cash-back function many merchants offer at the point of sale. In addition a debit card allows the user to make purchases. 

The cards are issued by the bank where the cardholder has an account, and non-banks cannot issue debit cards. The cards function on a Personal Identification Number (PIN) debit where punching in your PIN allows the card’s funds to be withdrawn directly from the bank account.  

Because when a consumer uses a debit card, the money comes directly from their bank account. This allows the bank customers to spend money by drawing on funds that they’ve deposited at the bank. 

Due to the funds being secured against actual bank account funds, the risk of non-payment by the cardholder is lower. Therefore the cost of servicing debit cards is usually much lower for banks, though that doesn’t necessarily translate to lower card acceptance costs for the merchant. 

These types of cards require electronic authorisation of every transaction and the debits are reflected in the user’s account immediately. The logos for each of these networks are located on the debit card where if you’re looking at a physical card, it should say “debit” somewhere on it. The types of debit card include a savings or a cheque account debit card.