Payment cards still play a vital role in the economy despite the increased use of payment apps through mobile devices. A study shows that by 2027, there will be around 28.44 billion payment cards in circulation in the U.S. alone. Before these reach the hands of consumers, payment cards need to go through issuing.
Debit card issuing is the process where a financial institution creates a debit card link to a customer’s account. The financial institution, known as the debit card issuer, is linked to one of the major card brands to ensure the card has a large usage area. Some of the more well-known brands include Visa, Mastercard, and American Express.
These brands have built up a network of merchants across the globe in order to facilitate payments on behalf of consumers. In some instances, some merchants piggyback off other merchants to facilitate purchases, and the result is an increased cost to the merchant, which is why some cards are not universally accepted.
What Is Debit Card Issuing?
What Type of Debit Card Issuing Options Are There?
Debit cards are convenient payment instruments and card issuing companies have expanded the card issuing options.
Physical Debit Card
Physical cards are the most prevalent card payment options. It’s issued to account holders when a new account is opened, and replacement cards might be issued as the card experiences wear and tear, goes missing, or gets stolen. The card is encoded to the bank account and provides a secure method of payment for a cardholder.
When cardholders use their debit card in-store to make payments, there are several options:
- Chip and PIN: With this method, users choose to insert their card into the card reader and complete the transaction by using a personal identification number (PIN).
- Magnetic strip: The transaction is concluded when the user swipes their card through the merchant reader.
- Tap to pay: This method allows the user to tap their card against the reader to complete the payment, which speeds up transactions. Visa’s Contactless Payment, for instance, allows users to activate or deactivate the feature at will. Users may also choose to add a PIN to payments to make transactions more secure.
There are different types of debit cards to consider:
- ATM card: These cards allow the consumer ATM access to their funds using their PIN number. A true ATM card can’t be used for other transactions.
- Instant payment debit card: Some debit cards are issued to have immediate access to the funds in the savings or checking account. Examples of these include the Visa Electron and the Mastercard Maestro. These cards aren’t always accepted, as some merchants find it hard to verify the information as the transaction is instant. For instance, you won’t be able to use an instant debit card at some toll services, parking services, or car rental places.
- Regular debit card: The card is linked to the bank account and relies on an authorization standard for transactions to be completed. Sometimes, there’s a delay in the request, and this could lead to the account getting overdrawn when all the merchant transactions go through and the account holder doesn’t keep track of payments. These cards are available as embossed and unembossed.
- Prepaid debit card: Financial institutions issue prepaid debit cards to clients that are not linked to their regular bank accounts. Instead, the card has its own spending limit, much like a gift card used at a store. Prepaid cards can be used by businesses to allow petty cash transactions and easy staff-related payments without having to apply for a credit facility. They’re also helpful to parents with teenagers that want to give them a vacation allowance but don’t want to risk high spending limits. These cards can be used at ATMs or for physical and online transactions. Cardholders need to load money on the card before it can be used. This is usually done by electronic transfer.
- Electronic Benefits Transfer (EBT) cards: Consumers who rely on government aid or subsidies are usually issued EBT cards so they can complete approved transactions. These cards usually don’t allow cash withdrawals to limit what the funds are used for.
Virtual Debit Card
Virtual cards have grown in popularity as it offers an additional layer of safety to purchases through secured encryption. Some of the virtual card options include:
- Permanent virtual debit card: This is a card linked to your bank account that has a secured encryption code, making it hard for would-be criminals to access your financial information. You can load the card information to cardless payment apps such as Apple Pay. Some virtual cards offer a temporary card verification code (CVC) for online purchases. This prevents hackers from accessing your card details and using them in the future.
- Temporary virtual debit card: These cards are often issued as a single-use card, and once you’ve made your purchase, the card expires.
Prepaid virtual cards: A prepaid virtual card isn’t tied to your regular bank account. Instead, it has an account linked directly to the card which cardholders need to pay funds into before they can access it. This is considered one of the safest ways to transact as some of these also include a temporary CVC for online purchases. This keeps your main bank account neatly tucked away with no direct link to the card.
End User Benefits of Using Evolve for Debit Card Issuing
Evolve uses the latest in application programming interfaces to allow our customers access to open banking and all the products and services this may offer. We are constantly shaping our products and services to meet our client’s needs, and we’re happy to offer debit card issuing to our clients. Some of the benefits of using our technology to facilitate your debit card issuing include:
We use BaaS: Banking as a service allows the effortless communication between banks and Fintechs to provide the end users with unfettered access to financial products in a safe environment. We offer secure banking which creates an ecosystem of open banking while still adhering to banking regulations.
You issue cards: Access to an open banking framework allows you to issue debit, credit, and virtual cards safely. The management platform is mobile-friendly, allowing you to keep track of your cards, limits, account statuses, and statements. The platform also allows for digital or physical card issuing.
At Evolve, our approach to banking products is open banking with strict security protocols that allows synchronicity between platforms and third parties while remaining compliant. While our technology is sophisticated, our user interfaces are intuitive and accessible to ensure an optimal customer experience. Learn more about Evolve’s card issuing capabilities today.