How Debit Cards Work

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A debit card is a bank card or ATM card which can be used for cashless payment, or to withdraw cash from ATMs. It is usually a plastic (PVC) card manufactured in ISO 7810 format.

Unlike credit cards purchases made using the card are charged immediately or within a few days (debited). They are also often colloquially known as cash cards because they integrate additional electronic cash functions.

MasterCard is a debit system that is primarily used in the United States, but also worldwide. In addition, MasterCard operates the infrastructure of the Maestro Card, Cirrus is a brand of MasterCard ATM. A card with the Cirrus logo can be used worldwide at ATMs, which also show the Cirrus logo, and is often compatible with Maestro.

Unlike the debit card, whose costs are charged directly to the account holder’s current (daily or monthly), with the credit card it is debited directly from a pool of revolving credit, with reimbursement of expenses to be paid through the users bank in small installments. Their annual fees are generally lower than for debit cards.

A number of banks issue debit cards in conjunction with a checking account and the fees for payments by debit cards are much lower, and have a higher penetration than credit cards.

The debit card is fitted with a magnetic strip on the back which contains important information for the processing of transactions. Since the mid-1990s, many of the bank cards are equipped with a chip. This is a prerequisite for using the function as an electronic purse.

Debit cards usually include a dielectric embossed identification code that is read out capacitively. In contrast to the so-called MM-magnetic feature (modulated characteristic) which is difficult. Fraudulent withdrawals with doublets are primarily carried out abroad, where the MM feature will not be read.

In principle, the cards are characterized by a BIN (Bank Identification Number) which identifies the issuer of the card. ISO 7810 is the international standard that defines three formats for the cards: ID-1 ID-2 and ID-3. A credit card holder for ID: BIN, the holder’s name, date of start of validity, date of expiry and CVV or CVV2 number (last three digits on the back of the card).

The cards are manufactured by embedders, such as Oberthur Technologies, Sagem, Gemalto, ASK – RFID. Typically, when the card is associated with a secret code, it is provided directly by the manufacturer to the bearer, by mail (not through the issuing bank) to ensure better security.

The use of payment cards exposes the agent to be traced in its purchases, which can be used for business logic or political oversight. The Passenger Name Record (PNR), which is travel related usually incoporates data on payment cards.



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