Debit Card

By September 17, 2018Industry Terms

Debit cards withdraw funds directly from a checking or savings account so the cardholder can purchase goods or services.

Debit cards are issued to a cardholder by an issuing bank.

What is the Difference Between a Debit Card and a Credit Card?

While both debit and credit cards eliminate the need to pay with cash, they are not the same.

The primary difference is where the funds come from. Credit card purchases are charged against a line of credit. Debit card purchases withdraw money directly from a bank account.

Processing fees vary slightly depending on whether a debit or credit card was used to finalize the transaction.

When it comes to fraud and chargeback management, debit and credit card transactions are essentially treated the same. One notable difference is Mastercard’s dual message system and single message system–transactions that are authorized with PIN credentials have different chargeback reason codes than those processed with signature confirmation.

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