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A debit card transaction immediately deducts funds directly from the cardholder's bank account, unlike a credit card which involves borrowing funds.
Answer: True
Debit card transactions directly access the cardholder's bank account, resulting in immediate fund deduction, contrasting with credit card transactions which involve a line of credit extended by the issuer.
In many countries, debit card usage has become so prevalent that it has largely replaced the use of checks.
Answer: True
The widespread adoption of debit cards in numerous countries has led to a significant decline in the use of checks for everyday transactions, often replacing them entirely.
Debit cards can only be used for making purchases and cannot be used for cash withdrawals.
Answer: False
Debit cards are versatile payment instruments that facilitate both purchases and cash withdrawals, typically at ATMs or through cashback services at retail points of sale.
The cashback facility allows customers to withdraw cash without making a purchase.
Answer: False
The cashback facility enables customers to withdraw cash in addition to completing a purchase transaction at a participating merchant, rather than allowing cash withdrawal independently.
What is the fundamental difference between a debit card and a credit card transaction?
Answer: Debit card transactions draw funds immediately from a bank account, whereas credit card transactions involve borrowing funds.
How has the widespread use of debit cards impacted traditional payment methods?
Answer: Debit cards have surpassed checks in transaction volume in many countries.
Besides purchases, what other common function do debit cards serve?
Answer: Enabling instant cash withdrawals and cashback services.
What is the 'cashback' facility offered with debit cards?
Answer: A way to withdraw cash along with a purchase, subject to limits.
The front of a debit card typically features a magnetic stripe and a signature strip panel.
Answer: False
The front of a debit card typically features the EMV chip, card number, cardholder name, and expiration date. The magnetic stripe and signature strip panel are conventionally located on the reverse side of the card.
A virtual card is a physical card issued for online transactions to enhance security.
Answer: False
A virtual card is a digital payment credential generated for online transactions, offering enhanced security by not requiring the use of a physical card's details.
EFTPOS, offline debit, and the Electronic Purse Card System are the three primary methods for processing debit card transactions.
Answer: True
Debit card transactions are commonly processed through three main mechanisms: EFTPOS (Electronic Funds Transfer at Point of Sale), offline debit (signature-based), and the Electronic Purse Card System.
An 'online debit' transaction requires immediate electronic authorization and deducts funds instantly from the user's account.
Answer: True
Online debit transactions necessitate real-time electronic authorization, leading to the immediate deduction of funds from the cardholder's linked bank account.
Offline debit transactions, unlike online debit, do not place an authorization hold on the customer's account.
Answer: False
Offline debit transactions, often referred to as signature debit, typically place an authorization hold on the customer's account, with the actual fund withdrawal occurring later, distinguishing them from online debit transactions.
An Electronic Purse Card System stores value directly on the card's chip, eliminating the need for a linked bank account.
Answer: True
The Electronic Purse Card System utilizes a chip to store monetary value directly on the card itself, thereby bypassing the requirement for a linked bank account for transactions.
The main issue with deferred posting of offline debit transactions is that it always results in immediate fund availability.
Answer: False
The primary issue with deferred posting in offline debit transactions is the potential for a discrepancy between the consumer's perceived available balance and the actual balance after the transaction is posted, which can lead to overdrafts if not managed carefully.
The 'e-card' service in France creates a permanent virtual card linked to a physical card for multiple online uses.
Answer: False
The 'e-card' service in France generates a temporary virtual card, typically for single use or a limited duration, to enhance security for online transactions.
Which of the following components is typically found on the back of a debit card?
Answer: Magnetic stripe
What is the primary purpose of a virtual card in debit card usage?
Answer: To offer enhanced security for internet purchases without a physical card.
Which of the following is NOT one of the three primary ways debit card transactions are processed?
Answer: Mobile wallet transactions
What is the key characteristic of an 'offline debit' or 'signature debit' transaction regarding fund availability?
Answer: An authorization hold is placed, with funds withdrawn later.
What is the main issue for consumers with the deferred posting of offline debit transactions?
Answer: The delay can lead to overdrafts if errors occur, unlike credit card grace periods.
What security measure is mentioned for online debit card transactions that don't use a PIN?
Answer: 3-D Secure protocols like Verified by Visa
What is the purpose of the 'e-card' service offered by French banks?
Answer: To generate a temporary virtual card for enhanced online transaction security.
Visa, Mastercard, American Express, Discover, and UnionPay are the only major global debit card networks.
Answer: False
While Visa, Mastercard, American Express, Discover, and UnionPay are indeed major global debit card networks, they are not the only ones; other significant networks also operate internationally.
In France, the contactless payment limit was increased to €50 during the COVID-19 pandemic to encourage card usage.
Answer: True
During the COVID-19 pandemic, France, among other nations, raised its contactless payment limit to €50 to promote the use of card payments and reduce physical cash handling.
In Vietnam, the national debit card scheme is managed by VISA Debit and Mastercard Debit.
Answer: False
In Vietnam, the primary national debit card scheme is NAPAS (National Payment Corporation of Vietnam), although VISA Debit and Mastercard Debit are also commonly issued by Vietnamese banks.
In Brazil, the primary debit card brands include Visa, Mastercard, and Elo.
Answer: True
Brazil's debit card market is dominated by major brands such as Visa, Mastercard, and the domestic scheme Elo, which are widely accepted for transactions.
In New Zealand, merchants typically charge customers a fee for using EFTPOS, while in the UK, such charges are universally banned.
Answer: False
In New Zealand, merchants generally do not charge customers for EFTPOS transactions, bearing the cost of equipment rental themselves. In the UK, while retailers historically made small charges, legislation now universally bans such surcharges for debit card usage.
The GIM-UEMOA system serves seven West African countries within the West African Economic and Monetary Union.
Answer: False
The GIM-UEMOA system serves eight West African countries within the West African Economic and Monetary Union (UEMOA), not seven.
Merchants in the U.S. prefer 'credit' transactions for debit cards due to lower processing fees.
Answer: False
Merchants in the U.S. generally prefer 'debit' transactions for debit cards over 'credit' transactions because debit transactions typically incur lower processing fees.
The 'Geldkarte' in Germany was designed for larger payments and achieved widespread popularity.
Answer: False
The 'Geldkarte' in Germany was designed for smaller, contactless payments and did not achieve widespread popularity, with many partners discontinuing its acceptance.
EFTPOS in New Zealand accounted for the majority of retail transactions in 2006 but has since seen a significant decline in popularity.
Answer: True
EFTPOS in New Zealand represented a substantial portion of retail transactions in 2006, holding a majority share, but its usage has considerably decreased in subsequent years.
Taka Pay is Bangladesh's first domestic card scheme, launched to reduce reliance on international card networks.
Answer: True
Taka Pay, launched in November 2023, is Bangladesh's inaugural domestic card scheme, established to lessen dependence on international payment networks like Visa and Mastercard.
Bancontact is the national debit card system in Belgium, historically co-branded with Visa Debit.
Answer: False
Bancontact is Belgium's national debit card system. Historically, it was co-branded with Maestro, and increasingly, it is being co-branded with Debit Mastercard or Visa Debit.
In Canada, Interac Direct Payment (IDP) has been the most popular payment method since its introduction in 1994.
Answer: True
Introduced in 1994, Interac Direct Payment (IDP) has become Canada's predominant payment method, facilitating a large volume of debit card transactions.
Redcompra is the EFTPOS system used in Chile for various retail and restaurant purchases.
Answer: True
Redcompra serves as Chile's EFTPOS system, widely utilized for transactions across diverse retail and dining establishments.
In Colombia, debit cards are commonly branded as Maestro, Visa Electron, Visa Debit, and Mastercard-Debit.
Answer: True
Colombian debit cards frequently carry brands such as Maestro, Visa Electron, Visa Debit, and Mastercard-Debit, reflecting both domestic and international network affiliations.
The Dankort in Denmark is frequently issued as a standalone national card without international brand integration.
Answer: False
The Dankort in Denmark is often issued as a 'Visa/Dankort,' integrating the national Dankort functionality with the international Visa network, rather than existing solely as a standalone card.
In France, banks typically do not charge annual fees for debit cards because they are cost-efficient compared to checks.
Answer: False
In France, banks often do charge annual fees for debit cards, despite the cost-efficiency of card processing compared to checks, which are typically free for customers.
The Saudi Payments Network (mada) is overseen by the Saudi Central Bank (SAMA).
Answer: True
The Saudi Payments Network (mada), Saudi Arabia's primary electronic payment system, operates under the supervision of the Saudi Central Bank (SAMA).
In Serbia, DinaCard is the most popular debit card brand due to its widespread acceptance and perceived security.
Answer: False
While DinaCard is Serbia's national debit card brand, Visa, Mastercard, and Maestro are generally considered more popular and widely accepted, often requiring specific requests as additional cards.
NETS manages Singapore's debit service and was founded by major local banks.
Answer: True
NETS (Network for Electronic Transfers) is the entity that manages Singapore's debit service, having been established by prominent local banks to centralize electronic payment operations.
In South Korea, 'Debit cards' and 'Check cards' are interchangeable terms for the same type of payment instrument.
Answer: False
In South Korea, 'Debit cards' and 'Check cards' are distinct; debit cards are typically bank-issued for specific networks, while check cards are issued by card companies and have broader acceptance.
In Spain, debit cards are used less frequently than credit cards at ATMs.
Answer: False
In Spain, debit cards are frequently used at ATMs, often more so than credit cards, as they represent a more economical option for cash withdrawals.
Common debit card brands in Sweden include Visa Debit, Visa Electron, Debit Mastercard, and Mastercard Maestro.
Answer: True
Swedish debit card offerings commonly feature brands such as Visa Debit, Visa Electron, Debit Mastercard, and Mastercard Maestro, which are widely accepted within the country.
Smart Pay transactions in Taiwan typically require a signature for non-contactless payments.
Answer: False
Smart Pay transactions in Taiwan, particularly for non-contactless payments, typically require a Personal Identification Number (PIN) rather than a signature.
Network International is the primary debit card network in the United Arab Emirates (UAE).
Answer: True
Network International, a subsidiary of Emirates Bank, serves as a primary processor for debit cards widely accepted within the United Arab Emirates (UAE).
Barclays Connect was the first debit card issued in the UK, aiming to reduce costly cheque processing.
Answer: True
The 'Barclays Connect' card, introduced by Barclays in the UK in the mid-1980s, was among the first debit cards issued there, intended to mitigate the expenses associated with cheque processing.
In Vietnam, NAPAS is the primary debit card network, and VISA Debit and Mastercard Debit are less common.
Answer: False
While NAPAS is Vietnam's primary national debit card network, VISA Debit and Mastercard Debit are actually the most commonly issued card types by Vietnamese banks.
The 'Girocard' system in Germany is frequently co-branded with either V Pay or Maestro.
Answer: True
Germany's 'Girocard' system is often co-branded with international networks such as V Pay or Maestro, thereby expanding its usability.
The 'Laser' card system in Ireland was withdrawn on February 28, 2014, being replaced by international schemes.
Answer: True
The Irish debit card system known as 'Laser' was fully withdrawn on February 28, 2014, with its functions being superseded by international card schemes.
In Kuwait, KNET transactions are typically free for both customers and merchants.
Answer: True
Transactions conducted through Kuwait's KNET system are generally free of charge for both the consumer and the merchant, contributing to its widespread use.
In Indonesia, the Gerbang Pembayaran Nasional (GPN) requires customers to have at least one GPN card.
Answer: True
Indonesia's national debit card scheme, Gerbang Pembayaran Nasional (GPN), integrates existing national bank systems, and customers are required to possess at least one GPN-affiliated card.
J-Debit in Japan has achieved widespread popularity since its introduction in 2000.
Answer: False
Despite the prevalence of cash cards, the J-Debit system in Japan has not achieved widespread popularity since its introduction in 2000.
In Belgium, Belgian debit cards are increasingly co-branded with Debit Mastercard or Visa Debit, moving away from Maestro.
Answer: True
Belgian debit cards, historically co-branded with Maestro, are now increasingly being issued with Debit Mastercard or Visa Debit affiliations.
In Canada, Interac Direct Payment (IDP) has led to more transactions being completed using debit cards than cash since 2001.
Answer: True
Since 2001, Canada's Interac Direct Payment (IDP) system has facilitated a shift where debit card transactions have surpassed cash transactions in volume.
Which global debit card network is NOT listed among the five major ones in the source?
Answer: JCB
What is the significance of 'dual-branded' debit cards?
Answer: They allow usage both domestically within a national network and internationally on a co-branded network.
In Australia, what is the local interbank network called?
Answer: EFTPOS
What is the primary debit card system in Canada, introduced in 1994?
Answer: Interac Direct Payment (IDP)
What is the 'Girocard' system in Germany often co-branded with?
Answer: V Pay or Maestro
When was the Irish debit card system 'Laser' entirely withdrawn?
Answer: February 28, 2014
How did the COVID-19 pandemic affect contactless payment limits in Ireland?
Answer: Limits were increased from €30 to €50.
What is the primary debit card network in Kuwait, known for being free for customers and merchants?
Answer: KNET
What is the significance of Indonesia's national debit card scheme, GPN?
Answer: It incorporates existing national bank schemes and is mandatory for customers to have at least one GPN card.
What has been the popularity trend of the J-Debit system in Japan since its introduction in 2000?
Answer: It has not achieved widespread popularity.
Who oversees the Saudi Payments Network (mada)?
Answer: The Saudi Central Bank (SAMA)
In Serbia, which debit card brands are considered more popular and secure than the national DinaCard?
Answer: Visa, Mastercard, and Maestro
What is the role of Network International in the UAE's debit card system?
Answer: It processes debit cards widely accepted in the UAE.
What distinction is made between 'Debit cards' and 'Check cards' in South Korea?
Answer: Debit cards are bank-issued for specific networks; Check cards are company-issued and more widely accepted.
Why are debit cards used more frequently than credit cards at ATMs in Spain?
Answer: They represent a cheaper alternative for cash withdrawals.
What is the 'Carte Bancaire' (CB) system in France?
Answer: France's national payment scheme.
What is the 'GIM-UEMOA' system related to?
Answer: The regional switch for the West African Economic and Monetary Union (UEMOA).
What is the primary issue for merchants in the U.S. regarding 'credit' transactions for debit cards?
Answer: They incur higher processing fees compared to 'debit' transactions.
What has been the recent status of the 'Geldkarte' in Germany?
Answer: Many partners have stopped accepting it, with plans for its retirement.
What was the popularity share of EFTPOS in New Zealand retail transactions in 2006?
Answer: 70%
What is 'Taka Pay' in Bangladesh?
Answer: A domestic card scheme launched in November 2023.
How are Belgian debit cards typically co-branded today?
Answer: Historically with Maestro, but increasingly with Debit Mastercard or Visa Debit.
What has been the trend for debit card usage versus cash in Canada since 2001?
Answer: More transactions are completed using debit cards than cash.
What is the 'Redcompra' system used for in Chile?
Answer: Purchases at various retail establishments.
Prepaid debit cards are primarily designed for individuals with excellent credit histories.
Answer: False
Prepaid debit cards are typically designed for individuals who may not qualify for traditional credit cards or checking accounts, including those with limited or poor credit histories, or the unbanked population.
Disputing a charge is generally easier with a debit card than with a credit card because the funds have already left the account.
Answer: False
Disputing a charge is generally considered easier with a credit card than a debit card. This is because credit card transactions involve borrowed funds, providing a buffer for dispute resolution, whereas debit card transactions immediately withdraw funds from the cardholder's account, making reversals more complex.
Fraudulent debit card charges can lead to overdrafts or bounced checks if the cardholder's checking account balance is insufficient.
Answer: True
Due to the immediate deduction of funds, fraudulent debit card charges can deplete a cardholder's checking account balance, potentially resulting in overdraft fees or bounced checks if the balance is insufficient to cover the unauthorized transactions.
Debit cards are often used by college students and expatriate workers for financial management and remittances.
Answer: True
Debit cards serve as practical financial tools for college students, who may lack established credit, and for expatriate workers seeking convenient methods for remittances to their families.
The Dodd-Frank Act in the U.S. prohibits merchants from setting any minimum purchase amount for credit card transactions.
Answer: False
The Dodd-Frank Act permits U.S. merchants to impose a minimum purchase amount, not exceeding $10, for credit card transactions, as a measure to offset processing costs.
FSA, HRA, and HSA debit cards in the U.S. are restricted to medical expenses and may not be usable for general purchases.
Answer: True
Debit cards linked to Flexible Spending Accounts (FSA), Health Reimbursement Arrangements (HRA), and Health Savings Accounts (HSA) in the U.S. are specifically designated for qualified medical expenses and are typically restricted from general retail purchases.
Under the U.S. Electronic Fund Transfer Act, reporting a lost debit card within two business days limits liability to $50.
Answer: True
The U.S. Electronic Fund Transfer Act stipulates that a cardholder's liability for unauthorized charges is capped at $50 if the lost or stolen debit card is reported within two business days of discovery.
Challenger banks like Monzo and Revolut in the UK commonly offer fee-free overseas spending on their debit cards.
Answer: True
Prominent UK challenger banks such as Monzo and Revolut frequently provide their customers with debit cards that allow for fee-free spending abroad.
Visa and Mastercard typically prohibit merchants from imposing minimum purchase amounts on debit card transactions.
Answer: True
Visa and Mastercard generally prohibit merchants from establishing minimum purchase requirements for debit card transactions, aiming to ensure broader accessibility for consumers.
Who has historically been the primary market for prepaid debit cards?
Answer: Unbanked individuals.
Which of the following is cited as a risk associated with prepaid debit cards?
Answer: Potential loss of funds if the card is not registered and lost.
Why is disputing a charge generally considered easier with a credit card than a debit card?
Answer: Debit card funds are immediately withdrawn, making reversal more complex.
What problem can arise from fraudulent debit card charges due to the immediate deduction of funds?
Answer: Potential overdrafts or bounced checks if the account balance is insufficient.
How are debit cards utilized by expatriate workers according to the source?
Answer: To send money to their families who might hold an affiliated debit card.
What impact did the UK government's requirement for fee-free basic bank accounts in January 2016 have?
Answer: It led to the departure of several firms from the prepaid debit card market.
Under the U.S. Electronic Fund Transfer Act, what is the maximum liability for unauthorized charges if a lost debit card is reported after 60 days?
Answer: All funds in the account
Which of the following is a key benefit often provided by UK challenger banks like Monzo and Revolut?
Answer: Fee-free overseas spending on their debit cards.