Debit Cards


What is a debit card?

Debit cards are similar to ATM cards. You can use your debit card with your personal identification number (PIN) to withdraw cash from your bank account at your bank’s ATMs. You can use it to purchase goods and services. For purchases made on debit cards and ATM cards, the card is read and the purchase amount is immediately deducted from your bank account. You can spend only the amount in your account. Make sure your card is safe at all times.

Unlike ATM cards, debit cards carry an additional VISA or MasterCard branding which allows customers to perform signature-based Point-Of-Sale (POS) transactions. While this may seem similar to credit cards, do note that when you use credit cards, you are paying on credit. But when you use a debit card, the purchase amount or withdrawal is deducted immediately and directly from your bank account.

Fees may be charged for debit cards, for example, there may be an annual fee, a replacement fee for lost cards and a fee for withdrawals made abroad.

Risks arising from debit card usage and safeguards

Although banks in Singapore have replaced magnetic stripe-only debit cards with chip cards, banks continued to keep the magnetic stripe for overseas use. While chip technology can reduce the risks of cloning, the magnetic stripe portion of the debit card can still be cloned. As debit cards allow customers to sign off on the receipt, there is also a risk of forgery.

Some merchants allow you to make transactions below a certain value without the need to sign off on the transaction receipt. Do ask the merchant for a receipt of the transaction to ensure the correct amount is deducted. If the wrong payment amount is deducted, do contact your bank quickly to ask if it can help to reverse the transaction.

Your debit card details (such as name, account number, expiry date etc) may be captured by fraudsters either through skimming or via intercepted online transactions. Fraudsters will then be able to use such information to clone a card or perform fraudulent card-not-present transactions (such as online or mail-order-telephone-order (MOTO) transactions).

However, for online purchases with merchants whose websites are enabled with the 3D Secure Technology, you will be asked to enter a One-Time Password before you can complete the transaction. This helps to protect you against online fraud and is a secure way to authenticate that you are making the purchase as the rightful owner of the debit card being used. Inform your bank immediately if you have received a One-Time Password (OTP) but you did not make the transaction.

What is my liability if my debit card is lost or stolen?

If you lose your debit card, inform the card issuer immediately. If your card is stolen, make a police report and inform the card issuer immediately.

Once you report the loss, your maximum liability for unauthorised charges prior to reporting the loss to the card issuer will be capped at $100. This cap applies provided you have not acted fraudulently, or were not grossly negligent, or did not fail to inform the card issuer as soon as reasonably practicable after you became aware that the card was lost or stolen.

Do check with your bank on its policy for lost or stolen debit cards.

Tips for consumers

  • Never leave your debit card or documents containing its details lying around.
  • Sign the back of your debit card with permanent ink as soon as you receive it.
  • Keep a record of your card numbers, their expiration dates, and the phone number and address of the bank in a secure place. 
  • Keep card-related information, such as your personal identification number (PIN), separate from your card. 
  • Safeguard your card details. Do not disclose your personal identification number (PIN) for cash withdrawals to any one. Memorise your PIN. 
  • Only shop at reputable and legitimate merchants (including online stores). Do not perform online transactions using shared devices such as computers in cybercafes. 
  • When you make small value transactions without the need to sign off on the receipt, ask the merchant for a receipt of the transaction to ensure the correct amount is deducted. 
  • Check regularly that your cards are with you. 
  • Call the bank immediately if your card or card information is lost of stolen. Note the time and date when you do so.

Comparison of ATM, Debit and Credit Cards

  ATM card Debit card Credit card
Transaction mode  Purchase/withdrawal amount immediately debited from your bank account Purchase /withdrawal amount immediately debited from your bank account Purchase /withdrawal amount is a borrowing that you must repay the bank
Payment mode You need to provide your personal identification number (PIN) to make purchases at merchants or withdrawals at ATMs You need to sign off on the receipt for purchases made over POS terminals without the need to provide your PIN. You might not need to sign off receipt for small-value purchases at selected merchants

You need to provide your PIN to make withdrawals at ATMs
You need to sign off on the receipt for purchases made over POS terminals without the need to provide your PIN. You might not need to sign off receipt for small-value purchases at selected merchants

You need to provide your PIN to make withdrawals or cash advances at ATMs. Note that cash advance is a form of borrowing that you must repay the bank
Main risks Risk of cloning / card skimming arising from the use of magnetic stripe technology. The banking industry is taking active steps to address this risk, such as migrating ATM cards to the more secure chip technology by 2014 and providing SMS alerts when transaction exceeds a certain amount Risks arising from the payment convenience of debit cards over POS terminals (e.g. forgery of signature to make purchases; wrong amount debited for small-value purchases that do not need signature)

Risk of cloning / card skimming arising from the use of magnetic stripe technology. The banking industry has taken steps to address this risk since 2010, such as replacing of magnetic stripe-only cards with chip cards, and providing transaction alerts. However, the risk of cloning / card skimming persists as long as the magnetic-stripe is activated.

Risk of card details compromise through intercepted card-not-present transactions (such as online or mail- order-telephone-order transactions)
Risks arising from the payment convenience of debit cards over POS terminals (e.g. forgery of signature to make purchases; wrong amount debited for small-value purchases that do not need signature)

Risk of cloning / card skimming arising from the use of magnetic stripe technology. The banking industry has taken steps to address this risk since 2010, such as replacing of magnetic stripe-only cards with chip cards, and providing transaction alerts. However, the risk of cloning / card skimming persists as long as the magnetic-stripe is activated.

Risk of card details compromise through intercepted card-not-present transactions (such as online or mail- order-telephone-order transactions)
Fees Typically no fees payable. But there might be fees payable for making withdrawals at overseas ATMs Fees are payable such as annual fee, fee for replacement card and fee for making withdrawals at overseas ATMs Fees are payable such as annual fee, fee for replacement card and fee for making withdrawals or cash advances at local and overseas ATMs

 

The above information is prepared in collaboration with the Association of Banks in Singapore.