A cash card is a plastic card that provides an easier way to make payment during purchases. It is also known as an electronic cheque, as the fund is withdrawn directly from the bank account or from the remaining balance on the card. In some cases, the card was specially designed for use on the internet during online purchases, and therefore there is no physical card.

The use of cash card has become widespread in many countries and it has slowly overtaken the cheque. It is widely used for telephone and internet purchases. Besides making payment through internet, cash card also allow for instant withdrawal of cash, just like the ATM card. Merchants can also offer "cashback"/"cashout" facilities to customers, where a customer can withdraw cash along with their purchase.



There are two types of debit cards:

• "On-line" debit cards: These cards usually are enhanced ATM (automated teller machine) cards which work the same as they would in an ATM transaction. It is an immediate electronic transfer of money from your bank account to the merchant's bank account.

• "Off-line" debit cards: These cards usually look like a credit card and resemble a credit card transaction. The merchant's terminal reads your card, identifies it as a debit rather than a credit card, and creates a debit against your bank account. However, instead of debiting your account immediately, it stores the debit for processing later -- usually within 2-3 days.

What we should know about debit cards:

• Using a debit card instead of writing cheques saves us from showing identification or giving out personal information at the time of the transaction.

• Using a debit card frees us from carrying cash or a cheque book.

• Using a debit card means we no longer have to stock up on traveler's cheques or cash when you travel.

• Debit cards may be more readily accepted by merchants than cheques, especially in other states or countries wherever our card brand is accepted.

• The debit card is a quick, "pay now" product, giving us no grace period.


The Visa Reloadable Prepaid Card is an example of prepaid cash card. It is a Visa card you load with your own money to make purchases everywhere Visa debit cards are accepted. It's safer than carrying cash and can help you manage your finances.





Another example is MasterCard Debit Card. It offers the ultimate in convenience and financial control by combining the worldwide acceptance and benefits of MasterCard cards, with an immediate deduction of funds from your checking account.



References

http://en.wikipedia.org/wiki/Debit_card
http://www.nclnet.org/debitbro.htm#intro
http://www.mastercard.com/us/personal/en/aboutourcards/debit/index.html
http://usa.visa.com/personal/cards/prepaid/reloadable_prepaid_card.html