Debit Card

A debit card is directly linked to your bank account, allowing you to use it in place of cash for payments. Also known as check cards or bank cards, they are primarily used to purchase goods and services or withdraw cash from ATMs. The card features the bank’s name, a card number, the cardholder’s name, and an expiration date.
A debit card enables electronic transactions, whether online or in-person, directly from your bank account. Nowadays, payments can be made easily by swiping the card or using contactless technology, where you simply tap the card. It also helps in tracking your spending by providing a detailed record of transactions.

4 Features of Debit Card

1) Instant access to funds:

You don’t need to visit the bank in person to withdraw cash. Instead, you can use a debit card for payments or withdraw cash from nearby ATMs. This simplifies transactions for any goods and services you purchase.

2) 24/7 access to ATM withdrawals:

Individuals can go to nearby ATMs to get access to cash.

3) Contactless payment:

Individuals do not need physical contact to make transactions thanks to the contactless feature of debit cards.

4) Know spending limit:

You can monitor your spending limit through online or mobile banking, which provides you with detailed statements.

Top 5 Benefits of Debit Card

1) Convenient to Use :

Many people and merchants feel secure accepting debit card payments. This makes it easy to carry and make secure payments 24/7.

2) Works as emergency fund:

In an emergency, you don’t need to go to the bank to withdraw cash; you can use your debit card for payments. Many banks have ATMs located near stores, malls, and hospitals, allowing people to access money immediately.

3) Security:

Any individual can make secure payments with a debit card, which includes a four-digit PIN that is difficult to crack or counterfeit. Additionally, you can easily block the card using mobile banking if it is lost or stolen.

4) For Budgeting:

Transactions made through mobile banking or online banking help track daily expenses and provide insights on how to allocate funds for budgeting.

5) Used in different Countries:

Debit cards are utilized across various countries, albeit with some charges, yet they streamline the payment process without the need to carry physical cash.

How to get a debit card?

In order to get the debit card one should follow the steps given below:

1) Open Bank Account:

To obtain a debit card, an individual must first apply for a bank account. After the account is opened, the individual completes a form requesting the debit card. Within a week or a few days, the debit card and its PIN will arrive at the bank. This process allows you to receive your debit card with ease.

2) Have to pay a separate fee for debit card:

Individuals need to pay a certain amount for a debit card, with banks typically charging an annual fee. Additionally, banks charge fees if the debit card is lost or if the individual forgets their PIN.

3) Set up a PIN:

The bank typically provides the initial PIN, but you must change it by visiting an ATM.

What are the charges involved in debit card?

1) Initial Charges:

When filling out the form for a debit card, you need to pay the annual fee for the card.

2) ATM Charges:

Some banks charge ATM fees, while others do not. However, you must pay a fee if you use your card at another bank’s ATM.

3) Foreign Transactions Fees:

There are charges and fees involved when an individual uses a debit card in a foreign country.

4) Debit card replacement Fees:

Banks typically charge a fee if an individual’s debit card is lost or stolen.

5) Renewal Fees:

Banks charge fees annually for debit cards.

What are the terms Used in debit card?

1) Bank account:

It is the individual’s account where they keep money for daily use. Typically, the bank provides a debit card if the individual has a bank account.

2) ATM(Automated Teller Machine):

It is a small space created by the bank with a machine that allows individuals to withdraw a limited amount of money. It operates 24/7, providing easy access to funds.

3) PIN(Personal Identification Number):

Banks provide cardholders with a four-digit confidential number known as a PIN. This PIN is used at ATMs and POS machines to confirm purchases.

4) POS Terminal:

The point of sale (POS) is a machine used by merchants to accept payments from customers. In a POS transaction, the customer either swipes their card or uses contactless payment methods.

5) Charges and Fees:

Charges and fees are the amounts levied by banks to provide safe and secure services.

What are the disadvantage of Credit Card?

1) Includes various fees:

Initially, users are required to pay annual charges, PIN charges, ATM fees, replacement fees, renewal fees, and foreign ATM fees, which can accumulate significant costs for regular users.

2) Limited Facility than Credit Cards:

The funds in bank accounts are limited and can only be spent up to the available balance. However, credit cards offer the flexibility to use money and repay it later. Additionally, credit cards often provide perks such as cashback, discounts, and rewards for purchases, which are not available with debit cards.

3) Hassel of forgetting PIN:

The requirement of a PIN for transactions at ATMs and POS terminals can be inconvenient, as it necessitates a trip to the bank to request a new PIN and may incur additional charges.

Debit card in Nepal

Debit cards are widely used in Nepal for various banking operations like internet purchases, ATM withdrawals, and point-of-sale transactions. These cards, linked to bank accounts, provide direct access to funds without credit. Himalayan Bank pioneered ATMs in Nepal in 1995. To get a debit card, inquire at your chosen bank about requirements and options.

How many debit card is issued in Nepal?

Date	Mid-July 2022	Mid-March 2023	Mid-July 2023	Mid-February 2024	Mid-March 2024	Growth Rate
Access to Payment Systems	10,856,357	11,874,649	12,245,485	12,524,121	12,651,185	7%
Number of Transactions	11,127,683	10,940,532	11,838,532	11,417,089	11,523,192	5%
Total Amount(in million)	85,141	85,141	90,541	89,744	91,480	7%

Source: Nepal Rastra Bank

What are the information required for debit card?

1. Cardholder’s Name:

The name of the person authorized to use the card.

2. Card Number:

A unique sequence of numbers identifies the card.

3. Expiration Date:

The date after which the card is no longer valid.

4. Security Code (CVV/CVC):

A numerical code, typically three or four digits in length, is printed on the card. It serves to authenticate online and over-the-phone transactions, confirming the card’s physical possession by the user.

5. Card Network Logo:

Such as Visa, MasterCard, American Express, etc., indicating the network the card is affiliated.

6. Chip:

A compact metallic square is positioned on the card’s front. It securely holds encrypted data and aids in verifying transactions when inserted into a chip-enabled terminal.
7. Magnetic Stripe: A dark stripe located on the card’s backside, carrying data similar to the front. It allows for swiping through a card reader to conduct transactions in cases where the merchant lacks chip-enabled technology.
8. Issuer Information: This might include the bank’s name or logo and sometimes the bank’s contact information.

What kinds of debit card fraud are there?

1) Card Skimming:

Card skimming primarily occurs at ATMs and point-of-sale (POS) terminals, where individuals insert their cards. Scammers illicitly obtain card details by affixing tiny devices to these machines. They may also capture PIN details, compromising cardholders’ security.

2) Phishing:

Phishing scammers utilize digital platforms such as email to impersonate various entities, like banks, schools, or employers. They often include links to counterfeit websites or forms, supposedly for profile verification, but designed to extract personal information. These deceptive websites closely mimic legitimate bank sites, intensifying the deception and tricking victims.

3) Customer Support Department:

Instances abound where fraudsters pose as bank employees, soliciting bank details from unsuspecting individuals. They typically request PINs, OTPs, and sometimes even specific desk information under the guise of assisting, all with the intention of stealing sensitive data.

How to avoid debit card fraud?

1) Secure your PIN:

Avoid sharing your PIN with anyone; commit it to memory instead of writing it down. Always be vigilant of your surroundings, especially regarding cameras or suspicious activity, while entering your PIN. If you notice any dubious behavior, promptly change your PIN at an ATM to safeguard your account.

2) Secure your card numbers:

Only share your card numbers with trusted individuals, and avoid visiting websites related to lotteries or gift payments, as they may attempt to steal your data.

3) Destroy the old Debit card or unnecessary debit card:

Ensure that any extra debit cards you have are destroyed.

4) Don’t keep all money in one place:

Ensure you have two to three accounts and evenly distribute your funds among them.

5) Protect your mobile and computer devices with a password:

Ensure that your saved documents are protected by securing them with passwords.

6) Check your bank’s statement:

Make sure to regularly monitor your bank statements to ensure the security of your funds.