Visa Debit

What is a debit card?

Visa Debit cards function exactly like any Visa card but provide direct access to funds in a cardholder’s deposit account rather than a line of credit.  With Visa Debit, cardholders exercise the choice to “pay now,” compared with Visa credit products, which allow cardholders to “pay later.”

The success of debit

The success of Visa Debit means that more individuals are tapping into the power of Visa for transactions anytime and anywhere.  
 
At the end of September 2006, Visa Debit card volume grew 18 percent over the previous year, reaching US$2.5 trillion and surpassing global Visa credit volume of US$2.0 trillion.  There are now more than 741* million Visa Debit and Visa Electron cards currently in use around the world with 86 million debit cards in circulation in the Asia Pacific region.
 
* Excludes Interlink and PLUS cards.

How it works

Visa Debit can be used to purchase goods or access cash across all merchant environments, from typical retail transactions to mail, telephone and internet transactions.  When using the card, cardholders must verify their identity by signing a receipt at the point of sale, or by entering their personal identification number (PIN).

Visa product extensions

Over the last few years, market forces have created new demand for products based on the Visa platform with greater risk control features.  Market forces driving demand include the rapid growth of debit card volumes at the point of sale, and the need to offer payment solutions to higher risk customers. Visa has responded by launching two new product options that combine the benefits of widespread acceptance with enhanced risk management.

	Unembossed Visa - introduction Account details on the unembossed Visa card are printed rather than embossed (raised). When used for transactions where the card is present, the unembossed Visa card product is intended for use with online payment terminals that can instantly request issuer authorization, providing additional protection to cardholders and financial institutions. In cases where an online terminal is not available for authorization of a cardholder transaction, existing procedures for offline, paper-based, or call-in authorization may be used.    Click here for frequently asked questions on the unembossed card.

Positive Authorization Mandatory (X2X) Service Code

Service codes are three-digit values which issuers encode in the magnetic-stripe of a card.  These codes are used to convey instructions to merchant terminals on how a card should be processed. 
 
The first digit indicates if a card can be used internationally or is valid for domestic use only.  It is also used to signal if a card is chip-enabled.  The second digit indicates if the transaction must be sent online for authorization always ("X2X") or if transactions that are below floor limit can take place without authorization ("X0X").  The third digit is used to indicate the preferred card verification method (e.g. PIN) and the environment where the card can be used (e.g. at point of sale only).
 
Merchant terminals are required to recognize and act on service codes or send all transactions for online authorization.
 
Currently, service codes have no bearing on dispute processing and acquirer liability.  From April 2008, merchants and acquirers will be liable for transactions on cards bearing the X2X service code that were processed without authorization.