Cards can be classified on the basis of their issuance, usage, and payment by the cardholder. There are three types of cards:
1) Debit Cards
Debit Cards are the payment cards that provide the electronic access to the cardholder to his bank account. These cards are issued by the banks and linked to bank account. Debit Cards are used to
Withdraw cash from an ATM
Purchase of goods and services at the point of sale both domestically and internationally provided it is enabled for international use.
Currently, debit cards can be used in two types:
Online Debit Card- In an online debit card system there is a need for electronic authorization which reflects every user’s transaction in his account. Transactions in this system are secured by the PIN (Personal Identification Number).
Offline Debit Card- In offline cards, there is a daily limit or maximum limit as per the current account of the customer. These transactions take 2-3 days to reflect in the customer’s transaction.
2) Credit Cards
Credit Cards are the plastic cards which are issued by banks and other entities approved by the RBI to pay a merchant for goods and services. The cards are used for
Purchase of goods and services and E-commerce through interactive voice response and recurring transactions.
These cards can use domestically and internationally provided it is enabled for international use.
The cards can be used to withdraw cash from an ATM and for transferring funds from bank accounts, debit cards, credit cards, and prepaid cards.
3) Prepaid Cards
Prepaid cards are issued by banks /nonbanks against the value paid in advance by the cardholder and stored in such cards which can be issued as smart cards or chip cards, internet wallets, mobile accounts, etc. maximum limit that can be stored in any prepaid card at any point of time is Rs50000. The usage of prepaid credit cards depends on who has issued the cards. These cards can be used for
Withdraw cash from ATM.
Purchase of goods and services at the point of sale/E-commerce.
For domestic fund transfer from one person to another.
Other Types of Cards:
1) Smart Card
It contains an electronic chip that is used to store cash. There is no requirement of any signature, identification and payment authorization. The exact amount is deducted from the smart card during payment and is collected by the smart card reader machines.
2) Co-Branded Cards
A credit card that is offered by the credit card company that is jointly sponsored by bank and a retail merchant. These cards generally covered with a variety of incentives such as discounts and rebates.
3) Rupay Card
Rupay Card is the Indian version of debit/credit card. It is similar to international cards such as Master and Visa. It is launched by NPCI (National Payment Corporation of India) in India. All major public sector banks have started issuing Rupay Card. Benefits of Rupay card:
Transaction cost is reduced with the help of the Rupay card.
Users get alerts for every transaction made through this card.
The processing fee of the Rupay card is considerably low as compared to other credit/debit cards.
4) Kisan Credit Cards
Kisan Credit Cards is a scheme to provide timely and credit to farmers to meet their production credit needs besides meeting contingency expenses and expenses related to ancillary activities through a simplified procedure. The Kisan Credit Card offering credit to farmers in two types:
Cash Credit
Term Credit
