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60% of people use debit cards more than credit cards. Between 2002 and 2005 the percentage of people using debit cards grew from 47% to 60%. Now debit cards are the same percentage of purchasing products with cash at stores, 33%. People are using debit cards to purchase many items online too. People are becoming more credit aware as they enter the new millenium. People would rather pay with a debit card because they know that the debit card can take money right out of their bank account to pay for the item. People are more concerned about interest rates than they used to be. Debit cards offer a low cost or no cost to use them by most banking institutions, while credit cards on the other hand can put the buyer into quite a pile of extra bills.

Credit cards have more protection for the cardholder than debit cards do. Credit card companies will not hold the cardholder liable from fraudualnt sellers or stolen credit cards. Debit cards, on the other hand, have very little protection. If the cardholder waits more than 2 days to report any fraudulant activity or that their card was stolen, they could miss out on any type of protection their financial institution could give them. Also, if they wait more than 60 days before reporting, the theif who stole their card or the fraudulant seller could take everything out of their bank account.

Both credit and debit cards are faster and easier to make purchases, but they also have their downside opposed to cash.

It’s very easy to acquire a debit card. Simply talk to your banking institution and fill out an application. You will not need to worry about any type of credit check and there are no extra fees involved with getting or owning a debit card. You will get the card in the mail within about one week from filling out the application. There is also a PIN number involved with setting up and activating the debit card. You will get your PIN number through the mail also and when it arrives, you will need to call the telephone number associated with the PIN number. After you answer some questions, you will have to type in the PIN number you recieved in the mail to activate your new debit card.

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Unlike a credit card where you make purchases and pay later when issued a monthly bill a Visa debit card is linked directly to the funds in your bank account. You can only spend what you actually have and the money is taken straight away which eliminates the risk of accumulating debt in the way you can with a credit card.

Purchases or cash withdrawals

A visa debit card has two utilities. The first is the ability to purchase goods as per choice from select retail outlets. Usually you will find a signage in the store that says that they accept Visa debit cards. The other utility is to be able to withdraw cash. There are designated ATMs or Automated Teller Machines in which you can use the card and get to withdraw cash instantly from your own savings account. However when you use your Visa debit to withdraw cash or purchase goods you are required to verify your identity by typing in your PIN (personal identification number) into the ATM or card terminal in the store.

Visa debit

This is the first type of the product suite of a visa debit card. These Visa debit cards are usually embossed and bear the acceptance mark which enables the user to use the card in millions of locations worldwide wherever the Visa logo is displayed. The hallmark of such a card is the Visa signage or the flag symbol which appears on the front right side of the card and can be below or above the hologram.

Unembossed Visa

In such a visa debit card the appearance is just like a regular Visa card. However the difference lies in several aspects. The account number of 16 digits is printed instead of being embossed on the card. The same goes for expiration date and card holder’s name. The ‘electronic use only’ legend is located on the front of the card. There is no ‘V’ symbol embossed on the card. Since this is an unembossed card it cannot be used in a zip zap machine and can only be swiped at the terminal in the store.

Authorization Preferred

In such a visa debit card authorization from the user is mandatory at the terminal. In these types of cards a code within the magnetic strip or chip prompts the terminal for authorization.

Visa Electron

The typical signage of the Visa electron represented by a flying comet provides a wide degree of utility across over 13 million locations across the globe! You can use this visa debit card at more than a million ATMs across the world. The logo is always displayed on the front of the card. The account number can be present in part or in full. If present in part the last 4 digits only will be displayed on the card. The card will also mention the expiration date of the visa debit card. In addition the ‘for electronic use only’ legend is present on the front. THE BIN can be found directly beneath the account number of the front side. The CVV2 number is located on the back of the card only in cases where the full account number has been used.

Richard Greenwood writes on a range of Finance issues and is founder of credit and debit card comparison website www.click4credit.com.au

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Introduction

Having a debit card is a good thing but always used it for every purpose is not a good thing as it sometimes not perfect solution for your entire financial needs. Somehow you have to suffer some financial crisis and couldn’t use your debit card for it and needed a loan to get fastest cash in a least time span. Now with Payday loans without debit card which is especially crafted for the residents of UK ho are in need of some urgent cash to meeting their sudden expanses of mid month and debit card won’t be used for it. It becomes an apt way of having instant cash without using your debit card as the assurance of repayment on time.

Requirements

To being approved for payday loans without debit card borrower needs to meet a simple eligibility criteria which necessity of loan for approval. Borrower needs to have the following qualities while availing the same. These are as follows:

He must be legal on age i.e. 18years of age or above.
Must be a salaried one of UK with the earning at least £1500 monthly; if he wish to access the amount £500 or above.
He must be a permanent resident of UK for past 1 year along with the citizenship of UK.
He must be working at the same place for last 3 months.
A bank account is also needed for a payday loan and for Payday Loans No Debit Card it becomes the necessity for approval of this loan. So an active bank account must be possessed on his name; it should also be not less then 6 months old.

Once you meet the certain criterion of this loan you will be approved for this loan without having any need to place your debit as the security of a payday loan.

Features

Basically Payday loans without debit card are short term loan and it intended to tide the persons from their mid month financial crisis over till his next payday and these loan lenders typically being lent these loans for a short duration of 14 days to 1 month.

It has fast online services for everything applying besides being approved. And it one of the major benefits of applying for this online is that borrower don’t need to fax or post any of his valuable documents neither any credit check process nor any debit card is needed as the security purposes of the loan.

While applying for Payday loans with no debit card loan lenders provide a easy means of generating fast cash and also a means which make your repayment too as simple as that. The most prominent features of this is that the need for a debit card has been overcome but you are still fulfilled the above mentioned requirements.

Robin smith can tell you how to look better, live better and breathe better by giving you tips to improve your finances. He writes on loans. His ideas can help you rejuvenate your money. To know more about payday loans without debit card, payday loans no debit card, loans for payday and payday loans with no debit card and for more, visit at http://www.paydayloanswithoutdebitcard.co.uk

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In the United States, more and more people are using the internet for their shopping needs. No wonder, there are now a lot of payment options available for every shopper. A few years ago, the bulk of transactions have been made through credit cards. But now there are more and more online payment sites and merchant accounts providers that offer payment services. But if you think that you have seen the most convenient payment option yet, think again. A more convenient way to receive money and pay for purchases online is just starting to get noticed and it uses Visa debit cards.

Visa debit cards have been around for a number of years already. However, due to the financial slow down that is affecting everyone right now, more and more people want to cut their credit card spending. And as that happens, people are turning to debit cards for their basic financial activities like receiving money and paying for just about anything. This may be a good thing too; because with online debit cards, you can choose not to rely on credit. You will be using your own money when you load your debit card. This will effectively reduce your urge to buy things that you do not even need. Or if you are a merchant, you can also receive debit card funding via wire transfers or bank drafts from your own customers.

The latest Visa debit cards can be used not only in grocery stores but also in online shops and even for your purchases on the phone. And if you are using a debit card from Visa, you can use it anywhere as long as the party you are transacting with also uses Visa. For most people, the best thing about debit cards is that they do not need to be wary of credit ratings. As a matter of fact, one’s credit transactions are not part of the overall criteria when applying for a debit card. So, you absolutely do not need credit history or even income verification when getting this type of card.

Indeed, in the last decade, consumers have witnessed the spread of all sorts of payment platforms that make shopping, online or otherwise, more convenient. With the ever expanding card market, Visa debit cards like Spendone.Com can provide a better way for people to use money as they allow consumers to withdraw money from anywhere and transact with more than twenty million shops around the globe, and that is without ever resorting to debt or credit.

Graham Wesley operates a successfull Financial Consultancy Company based out of Washington and offers personal and business financial advice. Visa debit cards like Spendone can provide a better way for people to use money.

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Check cards and credit cards are great. They allow you to spend your money more easily, and also give you more freedom to buy what you want and need, without worrying about how much money you have when a credit line is involved. However, there is something to be said for the prepaid debit card. It’s a great money management tool, whether you have another debit or credit card or not. The glory of the cards is that you can load them with only the money that you want to spend on a particular expense, and then you won’t risk over spending. You can also use them to pay bills online, so that your personal bank account information isn’t put at risk.

Most websites are very secure these days, but identity theft is still a problem. With so many companies accepting online payments for utilities and other bills, having a card with less risk of loss on your end. Think about it like this. If you pay your electric bill online for $125, and someone hacks into the site or your computer and steals your information, you could risk losing everything in your checking account or having your credit card maxed out. This is a rare occurrence, but wouldn’t it make you feel better to put that money on a prepaid debit card and spend it as you need to? Then, when the money is gone, if someone steals your information and tries to use the card, you can simply cut it up and get a new one, with no loss to your financial situation.

Many people think that prepaid debit cards are reserved for those who can’t get other cards or for kids who are being taught financial responsibility. The truth of the matter is that there are so many uses for prepaid debit cards that it doesn’t matter who you are or why you use them, because there is something for everyone. When they first appeared, prepaid cards had high fees for loading money onto them and maintaining certain balances. However, there are now many cards to choose from that are completely free, including ATM withdrawals and adding funds.

If you’re looking to restore your credit, prepaid debit card companies have made this an option, as well. There are many cards that have credit building programs built into the card, so that when you use it properly and manage it well, it helps your credit rating over time. It won’t work as fast as a credit card would, but it’s better than nothing when you’re limited as to your options. Overall, prepaid debit card services are great for anyone who wants more control over their money or need a way to spend wisely without carrying around excessive cash.

Visit Spendone for more information on how to get a Prepaid debit card.

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Having access to a debit or credit card can be crucial for some people, especially when it comes to things like shopping online and paying bills. Cash is a hassle, and is widely frowned upon in the online shopping world and bill payments areas. You can’t buy a new computer desk online and send the company $200 in cash. You either have to have a money order, a check, or a credit or debit card. The prepaid Visa debit card allows more people to have access to buy the things that they want and spend the money that they need when they can’t get approved for a regular debit card or credit card.

Even if you have other credit cards or a checking account, using a prepaid Visa debit card can help you to manage your expenses much better than you would without it. You can do just about anything with a prepaid Visa debit card, because it will work the same as a traditional debit card. However, you can control how much money you have, and how much you spend. You can put just enough on there for your online purchase, and then if someone gets the information about your transaction, they won’t be able to spend money and rack up charges in your name, because there’s no more money on the card.

A prepaid Visa debit card is also a great alternative to traditional cards for kids, and is often more helpful than giving them cash. By giving them a prepaid debit card, you’re teaching them how to keep track of their spending and know how much they have at all times. You’re also showing them how the credit world works, and saving them the hassle of carrying around a bunch of cash. Every prepaid Visa debit card will let you withdraw money from an ATM, so if they do need cash, they can get it that way, which also teaches them more real-world skills than just handing them money.

It doesn’t matter if you can’t get approved for other cards, or if you just want a better way to shop online or manage your spending. Getting a prepaid Visa debit card is a great option for everyone with every need. Many companies offer these cards with no fees or extra charges for getting them, which makes them affordable, too. There is plenty that prepaid cards can do, whether you need them or just want them for your financial needs.

To get a Prepaid Visa debit card, or to learn more, visit Clevercash.

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Some people find it hard to get to the bank. Others just don’t have access to getting a checking account to cash their checks. For various reasons, people have needed alternatives to their payroll check cashing needs for years. Many companies have come up with a solution that saves them money and helps their employees. By using payroll debit cards to issue paychecks, people don’t have to worry about cashing their checks, and the company can save money on check printing and distribution. It is far more cost effective for a company to upload paychecks to a debit card than it is for them to distribute paper checks to all of their employees.

You can use payroll debit cards just like regular debit and credit cards. As long as the money is there, you can spend it anywhere that accepts Visa or MasterCard, depending on which logo is on your card. Originally, companies issued standard ATM cards for employees that didn’t have the debit capability, but lately more companies have been turning to the use of payroll debit cards to make payday more efficient for the company as well as the employee.

The use of payroll debit cards is seen a lot in factories and other large companies where there are more than 200 employees to manage on the payroll. It allows companies to streamline their payment processes, and they can also benefit by collecting ATM surcharge fees to help cover the cost of holding and distributing all of these cards. Some companies make this an option for employees, while other companies mandate that employees are paid via a company debit card. It’s not much different than having a company bank or credit union to cash your checks without having a traditional bank account.

Payroll debit cards are a great innovation for many reasons. They cut down on the use of paper and printing supplies for companies, and allow employees to access their money more easily and quickly. Although companies are still required to send out pay stubs, they’re still saving money and time in the payroll process. Whether a company has 50 employees or 500, payroll debit cards can be a great alternative to traditional paychecks. It’s more cost effective and convenient for everyone involved, and takes the hassle out of payday. Overall, payroll debit cards are a great asset to any business, both for the employer and the employee.

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To learn more about Payroll Debit Cardsor to apply for one, please visit Spendone.

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A virtual debit card, essentially, is an electronic version of a debit card that allows you to send money and pay for things online and over the phone. Most virtual debit cards have a physical card that the user carries, but they are not associated with PIN numbers, which makes them almost useless for physical point-of-sale transactions. These cards are the peak of the electronic age, offering electronic banking, payments, transfers, and authorizations, completely taking the paperwork and hassle out of banking for customers that have a virtual debit card.

If you’re looking for a faster, more convenient and efficient way to send money, pay bills, or manage your expenses, a virtual debit card can be a great solution. Especially if most of your banking and spending is done online or over the phone, virtual debit cards are a great option. They’re more difficult to get information from, and many times the amount of money you have is limited, so that you are less vulnerable to identity theft and stolen cards. These cards are usually prepaid and authorized by using the card number and the CVV2 number. The CVV2 is that tiny, three digit number on the back of your card, right next to the signature box.

Some stores will accept these cards as a debit, because they can input the card number and the CVV2 code for authorization. It works similar to a card-not-swiped, or CNS transaction, which many stores don’t allow. Grocery stores are among the most popular places that will accept these cards without a pin number. When you order a virtual debit card, you can be sure that you’ll be protected, because like a pin number, the CVV2 code is sent separately from the card, and isn’t embossed on the card itself. This will also help if your card gets stolen, because the thief won’t have the number that they need to use the card, making it impossible for them to use.

Virtual debit card users like the cards because they offer better money management options and doesn’t require them to use the money that they have in their checking account or on credit cards. Also, there are people who cannot get credit cards or checking accounts, for whom the virtual debit card is a great answer to their problems. There are a few drawbacks to this type of card, but if you aren’t worried about having a typical debit card, you’ll be fine.

Get a virtual debit card to use online, visit Spendone for further information.

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Just like ordinary gift cards, reloadable debit cards can provide anyone with a convenient way to make and receive payment. Basically, you load your debit card with funds from your bank savings account or credit card and then you are good to go. When your card balance is low, you can repeatedly load some more money to use it. You can use this type of card in places and establishments that accept such card. And recent figures estimate that there are over twenty million stores worldwide that accept this type of debit card.

Reloadable debit cards actually allow people to fill in most, if not all their basic financial needs. By allowing users, especially online shoppers, to have a usable card with no questions asked, debit cards can surely become the currency of the future. Not having a bank account or not having a good credit rating is not a problem if you apply for this type of debit card. And if you are a small company, you can even use this type of debit card to pay for your employees. This type of card payment option is really all about versatility and dependability, that’s why it is increasingly becoming popular.

Basically, reloadable debit cards are the same as ordinary prepaid cards. However, debit cards are often offered by reputable financial institutions and are accepted in most retail stores, online or otherwise. While it is true that you need to pay for your debit card application and some service charges, this type of payment card typically does not charge for interest. After all, the amount that you put into your debit card is your own money and not the financial institution’s. And if you really want to control your spending, you can even set a limit as to the number of transactions in which you can use your debit card.

Truly, if you are still carrying your paycheck in your pocket everyday, you are not cleverly using cutting edge payment option available to you. Also, if you are still bent on using cash every time you make a purchase, you are seriously limiting your buying options as almost all types of establishments nowadays accept electronic money. With reloadable debit cards like Clevercash.com, you can easily get approval without the hassles of credit background check. And because it is not a credit card, you do not pay interest nor receive monthly billing every month. Best of all, you can use it to shop online and buy products from all over the world without going over your budget.

Visit Clevercash to find out more about how reloadable debit cards can benefit you.

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Reloadable debit cards are now in vogue, especially since more and more financial institutions are holding back on their issuance of new credit cards. In fact, many banks are even slashing the credit card balances of many clients. If people who have good credit ratings are facing difficulties in securing new credit cards, how much more difficulty would a person with bad credit have to undergo to get approval for a credit card application? Do not ever think that you are in a rut if you have poor credit rating. There is an easy way for you to rebuild your bad credit.

For people who want to improve their credit rating, getting reloadable debit cards is a very wise step. Many people have realized that even if they have started to pay their loans and mortgages on time, a number of financial institutions are still wary of trusting them. It seems that paying your debts is not enough to prove that you are worthy of a better credit score.

Reloadable debit cards, also known as prepaid debit cards, are very similar to credit cards. Establishments and merchants who are accepting credit cards will surely accept your reloadable debit card too. One major difference between a prepaid debit card and credit card is that you will be the one to dictate how much your limit is. As you may have already known, the credit card limit (and also the interest rate) is dependent on the decision of the issuer. Not so when it comes to debit cards.

One of the reasons why not many people are using reloadable debit cards is that many really do not know how these cards work. In reality, however, this type of debit card is really quite easy to use. In essence, you will need cash in order to load money to your reloadable debit card. So, the amount of money you spend is limited on how much money you load into it. The good thing about this debit card is that you will be able to use it like a credit card but you do not have to worry about exorbitant finance fees and default payments. Furthermore, with reloadable debit cards, you will be compelled to just spend money that you have. Your credit rating will be positively affected if you are able to show that you are using your prepaid debit cards wisely. Maintaining such cards for a few months or years would truly help improve your credit score.

Manage your debts with all the convenience of a credit card, visit Spendone for more information on Reloadable Debit Cards.

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One of the most useful and smart financial tools to come around in the last decade is any debit card program. Debit card programs have gained in popularity with no end in sight. Just recently a newly launched debit card program boasted thousands of new members within weeks. And, it is with good reason. The benefits of using debit cards over credit cards are many and when all added together make great financial sense. It is one of the finest financial tools available today. And, it’s available to anyone no matter what their financial standing.

A debit card program isn’t subjected to high interest rates, late fees or over limit penalties because the account balance and what is available is controlled by you. You act as your own bank with oversight on how much in is your account where you spend it and how you spend it. Total control and total freedom is what a debit card program is all about. Having that kind of freedom can really be liberating. You may think that you have to sacrifice some of the flexibility of credit cards when you go to a debit card program but that is not so at all. You can still use a debit card anywhere you use a credit card just without the hassle.

Using a debit card program for all your purchases will keep you on the financial straight and narrow. There is no risk of overspending or getting into a bad credit situation because you have all the control. Getting started in a debit card program is easy and fast. Applying online is made easy with a simple application process that requires very little information. There is no worrying about a credit report being pulled or proving your income. You will get instant approval and be able to use your debit card online immediately. The actual plastic card will come to you in the mail later.

There is no doubt that using a debit card program is a brilliant way to control and oversee your finances. It is also important to note that any direct deposits you make into your account are instantly available as cash on your card no more waiting for deposits to clear before you can access the money. You can also make withdrawals at ATM’s all over the world. Everyone should consider a good debit card program and enjoy the benefits.

With a quality debit card program you can take control and oversee your finances quickly and easily. Visit http://www.clevercash.com for more information.

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Debit Cards

America is quickly becoming a cashless society. Whereas it would have seemed odd, or even in poor taste to do so in the past, people routinely use plastic to pay for even the smallest purchases, such as a Slurpee from 7-Eleven. Almost all gas stations allow you to “pay at the pump,” and even fast food restaurants began accepting “debit or credit” a few years ago. And that’s not to mention the millions of cashless transactions that occur every day in cyberspace, through web sites like eBay, Amazon.com, and other popular e-tailers.

Clearly, having some form of cashless payment is essential to being a fully functioning American consumer these days, and millions of people are opting to use a debit card attached to their checking accounts rather than traditional credit cards. Is this a wise move?

Dr. Jekyll’s Lovely Little Debit Card

The primary advantage of debit cards is that they give you access to cash. A little known fact about cash advances on traditional credit cards is that they begin accruing interest from the moment you get your hands on the money. This means that even if you paid last month’s bill in full, you will still have interest charges on your next bill whenever you take out a cash advance. Debit cards allow you access to cash through ATM’s at no interest – after all, it’s your money.

The other major benefit of debit cards is that they’re an option for credit constrained consumers. While it may seem like credit card companies will give cards to anyone, the truth is that once you make a serious mistake – such as falling behind on your card for a few consecutive months, resulting in a “charge off” – it can be very difficult to qualify for credit again anytime soon. Since some form of plastic is required for so many of life’s necessities, debit cards offer these people a means of remaining viable members of our cashless society.

Mr. Hyde’s “Instrument of Financial Death”

But there is a downside to debit cards, too. Consumer advocate, Howard Strong, even refers to debit cards as “financial death” cards. While his perspective may be a little over the top, he does cite several disadvantages of debit card usage in his 1999 book, What Every Credit Card User Needs to Know.

First, by using a debit card, you lose the advantage of using the credit card company’s money interest free. This interest free period occurs from the time you make a purchase until the due date of your bill. If, for example, you used your credit card to buy a $2,500 sofa the day after receiving your statement, you would then have more than 30 days to come up with the $2,500 before being charged interest. If you used a debit card, you would have $2,500 sucked out of your account the moment you made the purchase.

Secondly, using a debit card typically has no positive impact on your credit. Credit card companies report payment information to the three major credit bureaus each and every month. When you pay your bills on time, it has a positive effect on your credit score. Debit cards don’t utilize credit, so there’s nothing for the bank to report – unless, of course, you overdraw your bank account and then are unwilling or unable to pay whatever egregious fees the bank charges. In this way, using a debit card can have a negative effect on your credit.

Finally, using a debit card puts you at more risk than using a credit card because it is easier to “stop payment” of erroneous or fraudulent charges with a credit card. When Mr. Strong wrote his book in 1999, this was more of a problem than it is today, since much has been done to improve the security of electronic transactions. Still, the fact remains that someone could use your debit card to empty out your bank account, and while you would almost certainly get your money back, it could take some time. Since credit cards have no ability to draw on your savings or checking, this possibility doesn’t exist with them.

The Reality – You Need Both

If you can qualify for a credit card, even at a high interest rate, you should almost definitely have one. After all, credit cards help you build credit and the interest rate is irrelevant if you’re responsible and pay your bills in full and on time. You should also have a debit card for getting cash quickly and easily without the up-front interest that credit cards charge on cash advances.

If you’re really worried about the “Mr. Hyde” effects of debit card usage, consider opening a separate account tied to your debit card. You can set up automatic weekly or monthly transactions that move money from your primary account to this special account, so that the amount you could lose is always limited to $200, $500, or whatever you decide.

 

Carl Smith is a freelance financial consultant. Learn tips on how to manage your credit cards debts and access free credit reports.

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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 http://www.CleverCash.com.

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Online debit cards are typically a stepped up version of an ATM (Automatic Teller Machine) card. These are used to purchase goods and services in the same way that they are used in ATM transactions. As soon as the transaction is complete, the funds are electronically transferred from your individual bank account to the bank account of the business. Most checkout stations have a computerized pin pad system that allows you to swipe your card and enter your four digit PIN (Personal Identification Number) just like you would do at an ATM. The system verifies that you have the funds available in your account to pay for the goods or services.

Offline debit cards are different types of cards than online debit cards. These types of cards will typically look just like a traditional credit card and the transaction will follow the same process as a credit card transaction. The merchant’s check out station will read your card information and determine that it is a debit card rather than a credit card. It will then generate a debit to your bank account. The key difference is that it will not debit your account immediately. It typically takes about 2 to 3 days for the debit to be applied to your banking account. The majority of the offline debit card transactions are electronically verified to determine if there is enough money in your account to pay for the purchases. A consumer will sign a receipt, similar to a credit card receipt, instead of entering a PIN number into the pin pad device.

The differences between online debit cards and an offline debit cards can be confusing. There are some things to consider before you decide which card will work best for you. For example, does your financial institution charge a transaction fee for purchases made with the debit card and do they charge a monthly fee to use the car? Many merchants only accept cards that require a PIN number to complete the transaction, so this something else you will want to take into consideration. Finally, some people prefer that the online debit card features and the offline debit card features are on two separate cards rather than have both features on one card.

Owners of both online debit cards and offline debit cards, have a responsibility to maintain the security of the card. If your card is stolen, notify your financial institution immediately. If you think that you card number may have been stolen online, report this to your financial institution as well. Keep your receipts in a safe place. Thieves have been to use the information found on debit card receipts to make purchases online or over the phone. Always keep in mind that your card can be in your wallet and still be used fraudulently in cyberspace.

For more information on online debit cards, visit http://www.clevercash.com

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It seems that banks are constantly coming up with new ways for us to pay bills and withdraw money. First there were paper checks, then credit cards, then ATM cards, then debit cards linked to bank accounts, and now ACH electronic funds transfers. Of course, with each new payment method comes a new set of fees passed on to account holders and merchants. The smart merchant will weigh the pros and cons of each method with regards to safety, accountability, and processing cost, and then design her business practices to maximize profits without compromising customer service.

This article will help merchants do this by comparing two very similar payment methods-debit card charges and bank account ACH direct-debits. It will explain how switching customers who pay with debit-cards to direct-debit transactions can significantly reduce merchant processing costs.

What is a Debit Card?

A debit card is a bank issued card that allows its user to access the funds in his account to pay for merchandise or services. A debit card acts like a credit card, and is often associated with a credit card brand such as VISA or MasterCard, with the difference being that funds are immediately deducted from the cardholders checking or savings accounts when a purchase is made.

What is Direct-Debit?

Direct debit is an easy way to deduct a payment directly from a customer’s bank account. It uses the premise of a paper check but takes it to the next level with electronic funds transfer. With direct debit, the need to write paper checks is completely eliminated. Your customer simply gives you permission to take funds directly out of his checking or savings account and transfer them to yours. Direct-debit is typically used for auto-recurring billing of regular transactions, such as a monthly rent payment, so that written permission to transfer funds is needed only once and customers no longer need to write checks every month. But, it can also be used with an Online Payment Gateway to enable your customers to purchase your products or pay their bills directly from a checking or savings account instead of with a credit card or debit card.

What are the differences between a Debit Card transaction and a Direct-Debit transaction?

Debit card transactions and direct debit transactions are at their core the same-each authorizes a transfer of money directly from the cardholder’s account to the merchant’s account. And, from the consumer’s standpoint they are exactly the same.

From the merchant’s standpoint however, they are very different. The transactions are processed through different networks, and the payment processing charges differ significantly.

Debit card transactions require the merchant to obtain a credit card merchant account and often to sign a long-term contract and pay a fee to open the account. Debit card transactions are processed through the same network as credit card transactions, and funds are deposited, less a commission (known as the “discount rate”), into a merchant account. The discount rate for debit-card purchases is typically lower than for credit card purchases (This is because the bank is taking less of a risk with a debit-card that deducts funds immediately from a bank account than with a credit card.), however there are some merchant processors that do not extend this discount to their clients. Typically, 2-3% of the transaction plus a 30 cent inquiry fee will be deducted from a debit-card payment and the balance will be deposited into the merchant’s account.

Direct-debit transactions use the Automated Clearing House (ACH) network to move funds from one bank account to another. Thus, you can use your regular business checking account for Direct-Debit transactions. You will need to sign a contract with a company authorized to manage these ACH transactions, but there is typically no long-term commitment. You will pay a fee for each direct-debit transaction you process-but it is typically a flat-fee that is not dependant upon the size of the transaction. (There are some companies that do charge a percentage based fee for direct-debit transactions-you should avoid these processors!). This fee is typically less than $1 per transaction.

How much can merchants save with Direct-Debit Transactions?

Accepting direct-debit instead of debit-card transactions can generate significant savings for most transactions; with the rule of thumb being the larger the transaction amount the more the merchant saves. The following is a simple example using the PaySimple pricing structure:

Transaction Amount: $500

Cost to process via Debit Card (MOTO rate): $10.49 ($0.29 inquiry + 2.04% discount)

Cost to process via Direct-Debit: $0.55 flat

Total Savings per Transaction: $9.94

Total Monthly Savings (based on 250 transactions/month): $2,485.00

Are there Drawbacks to Direct-Debit transactions?

The largest drawback for merchants accepting direct-debit payments is that unlike debit-card payments, you will not immediately know if there are sufficient funds in the customer’s account to cover the charge. With a direct-debit, you will get NSF notification in 24 hours (far better than the weeks it typically takes for a paper check processed by the bank). This can be a significant concern for merchants who are providing goods or one-time services at the time of payment. But, in the majority of cases, 24 hour notification is sufficient.

Another concern is that customers will not be comfortable with giving a merchant direct access to their bank accounts. However, that is essentially what they are doing with a debit card transaction. The problem truly is one of education not of security or of process. Fortunately, that is an easy problem to solve. ElectronicPayments.org is a fantastic website that provides a wealth of customer education materials. Your payment processing company may also offer free marketing and educational literature that can be distributed to your customers.

The Bottom Line

Direct-debit transactions are just as safe as or safer than debit card transactions. Direct-debit and debit card funds are deducted immediately from customer accounts. Direct-debit transactions are just as simple to perform as debit card transactions, and both can be used for auto recurring payments, online payments, phone payments, and point-of-purchase payments. But, processing direct-debit transactions is significantly less costly for merchants than processing debit card transactions.

Lisa Hephner, PaySimple Marketing Manager About ACH Direct-Debit Processing For assistance with converting your debit-card customers to direct-debit, contact PaySimple: 800-466-099

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