Evolution of Payment Instruments

Decades back when people want to purchase some goods they go to the nearby shop and give hard cash to get the same. In 20th century there was a tremendous growth in technologies of all kind, so eventually payment industry also found its way to cope up with the pace in which the technologies evolve. Banks were computerized and People were introduced with payment cards through which they could make transaction which reduced the burden of standing in long queues to withdraw some bucks from an account. It reduced the risk of carrying cash to make transactions.

After some painful decades, at present we enjoy the luxury of carrying the cards easily to purchase anything-anywhere-anytime. As technologies evolve, now we have so many flavours of payment instruments like chip cards, contactless cards, wallets, mobile apps, etc. This blogger is created with the intention of giving as much possible information on all the possible sections of payment industry.



Saturday, January 9, 2016

ATM and Debit Cards

ATM Cards:

These cards are issued by banks or financial institutions that can be utilized by cardholder to withdraw cash from an Automated Teller Machine (ATM) or to avail other non-financial services (like a Balance Inquiry or an ATM PIN change, etc.,) in an ATM machine. A secret PIN is issued along with the card to enhance the security of the transactions which can be changed by the cardholder. The secret PIN has to be entered in all the card related activities.

An ATM card is always linked with a savings bank account and the amount is getting transferred from cardholder’s account (Issuer Bank) to Merchant’s account (Acquirer bank). ATM withdrawals can be made till the available balance of savings account is exhausted. The daily limit for ATM withdrawals is determined by the Issuer banks and it differs between banks.

Most of the banks now issue ATM cum Debit cards.



Features:
·         No need to carry cash
·         No need to visit the bank to withdraw money
·         Can withdraw money at any time (even on bank holidays and other than office timings)
·         Can be used at ATMs of the bank which issues the card and any affiliated bank

Debit Cards:

These cards are issued by banks or financial institutions that can be used to make purchases from any merchants or institutions through Point of Sale (POS) machines, to make purchases from any merchants through web sites (E-Commerce), to make cash withdrawals at ATM machines and other non-financial transactions at ATM and POS terminals.

A Debit card is always linked with a savings bank account and the amount is getting transferred from cardholder’s account (Issuer Bank) to Merchant’s account (Acquirer bank). Purchases/withdrawals can be made till the available balance of savings account is exhausted. The daily limit for purchase/withdrawals is determined by the Issuer banks and it differs between banks.



Features:
·         Can make purchases at stores without cash
·         No need to carry cash
·         No need to visit the bank to withdraw money
·         Can withdraw money at any time (even on bank holidays and other than office timings)
·         Can be used at ATMs of the bank which issues the card and any affiliated bank
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