Debit cards are getting more popular these days when compared to credit cards, thanks to more point of sale terminals (POS) at merchant establishments showing friendliness to debit cards.

Moreover, debit cards are also emerging as preferred transaction tools for facilitating e-commerce payments.

From Economictimes.indiatimes.com:

According to B Amrish Rau, V-P and country head, First Data Corporation, which has a joint venture with ICICI Bank for point of sales terminals, “Consumers are warming up to using debit cards at merchant location as they perceive it to be a more secured and a hassle-free way of transaction. Moreover, increasingly, it is also used for settling e-commerce transactions.”

E-commerce transactions have been growing by over 30% annually, with a lot of travel bookings shifting online. Going ahead, a lot transactions for insurance premium payments and mutual fund investments are expected to be big avenues for e-commerce where debit card usage is expected to pick up sharply, he added.

Banks on their part have also been coming out with attractive offers on debit card issued by them by giving a cash back offer on purchases at certain places and discounts at retail outlets, which is also making debit card an attractive payment option. Interestingly, most banks started actively focusing on this business when facing problems of recovery in their credit card business, post the 2008 sub-prime crisis.

According Maitri Kumar, head of marketing, HSBC India, “We focused on debit cards as we observed that a customer using a debit card actively is likely to have a deeper relationship with the bank. And, to engage the customer, we made them offers and ran usage campaigns which have worked well. We have an equal focus on both credit and debit cards as they meet different customer needs.

In a head-to-head comparison, debit cards are always superior to credit cards because hey give purchasing convenience and access to ready cash.