Is the Debit Card Still a Primary Instrument for e-payments?

Fariha Akhtar weighs in.

Payments and FinTech industry has always proved to be an exciting arena of innovation which is continuously evolving. When I graduated from university almost a decade ago, I did not hold a bank account but I was required to open one as soon as I took my first job so my salary could be transferred to that account. Alongside the account, I got a debit card so I could easily withdraw money from my account using an ATM or make purchases through POS. For years I used the account for the same reasons only, however, later with the convenience that internet banking brought, I started using my account for funds transfer to others as well. Even today, I mainly use my bank account to get my salary and then withdraw cash or to transfer funds to others including bill payments.

Like many, I barely use my debit card unless for withdrawal from ATM. That is what makes me question if the debit card is still a primary instrument for e-banking as it used to be till few years ago?   I believe with introduction of alternative payment mechanisms that allow cardless transactions making almost everything with your mobile, debit cards and bank accounts, a supplementary choice.

A kid fresh out of school may no longer need to have a bank account to receive his/her salary when taking up a job. All companies may have to do is to integrate their ERP system with a mobile wallet system to disburse salary of all employees to theirs m-wallets at the end of each month. Employees could use their mobile phones as a primary instrument to withdraw cash from an ATM, make purchases, fund transfers or bill payments. While the world is moving towards hands-free payments (see Google’s Hand-free), m-wallets or perhaps virtual cards linked to m-wallets can certainly make debit cards a thing of past.This could help banks and financial institutions save all the cost of issuing, maintaining and securing debit cards while giving the customers freedom to do all their transactions with their mobile phones instead of a piece of plastic.

Fariha is a Business Analyst in the Financial Tech industry in the UAE. Her views do not represent those of her employer. This article was originally published on the author’s LinkedIn Profile, here.

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