Page 41 - Banking Finance January 2025

ARTICLE

The rapidly growing popularity of digital payments: The Where the Debit Cards have been?
COVID-19 pandemic has highlighted the importance of Where are they going?
alternative payment options in the modern world. As a
result, innovative contactless methods like digital wallets, There's no doubt that debit cards will remain a popular
payment type. However, what the future holds in store for
QR codes, and P2P payment apps gained prominence.
the debit card depends largely on how cardholders of the
future are inclined to make transactions. Let's take a look
Cards' susceptibility to fraud: Despite advancements in
at two ways debit cards are already adapting to their
security features, traditional bank cards are still susceptible
cardholders' changing preferences.
to fraud and unauthorized transactions. They also face a risk
of being lost or stolen.
As debit cards directly access a cardholder's bank account,
maintaining control of funds is of the utmost importance.
Sustainability concerns: The environmental impact of EMV has helped curtail in-store fraud, but hasn't thwarted
producing and disposing of plastic cards is a growing fraud in online payments and other card-not-present
concern. As sustainability becomes a key focus globally, situations. The introduction of card controls that give
more and more card issuers are facing pressure to optimize cardholders a greater ability to track card use and monitor
their processes. their spending has been effective in helping fight this type
of fraud.
"Only the online payments where people may not be too
comfortable using UPI on a particular device or where it's Advanced card control apps offered by different bank's and
quite a large-value transaction or where the person is financial institute, allow cardholders to manage their cards
leveraging the benefits available on a particular debit card, directly from their mobile device. Cardholders can elect to
such as debit EMI, might be the instances where a debit receive real-time transaction updates, notifying them of
card is used," Garg said. every purchase made on their debit card. Allowing
cardholders to set spending limits, designate use locations
Consumers may eventually see no point in carrying debit and geographical parameters, and even require mobile
cards as there is an annual or quarterly fee for maintaining device proximity can have a significant impact on their
exposure and vulnerability to both card-present and card-
them but UPI is practically free. Garg pointed out that
not-present fraud.
merchants also prefer UPI because it does not draw a
merchant discount rate (MDR), but on debit cards at POS
merchants have to pay around 1%. "The consumer demand But should their card be compromised, cardholders have the
benefit of immediate, uninterrupted access to "turn off"
for debit cards may eventually fall and banks may also find
their card, both limiting further damage to their account
it costly to issue them in a scenario of low usage.
balance and the impact on their financial institution.
Going Card-less

Removing the physical card from the payment equation
might seem like the end of debit cards altogether. However,
syncing smartphone technologies with the functionality of
the debit card could just be the next step in its evolution.We
cant not ignore the contribution of E-wallets which are
secure, convenient, and user-friendly payment options that
are widely accepted across the globe.

In recent years, we've observed a slow shift towards NFC
technology that supports the use of mobile wallets. By
adopting mobile wallets, cardholders are transitioning their
spending process and changing how merchants accept

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