Debit card

While the technical term 'credit card' has become widely known, the debit card is rarely called by its official name: Italians simply call it 'Bancomat'. Let's explore what a debit card is, how it works, what costs it may involve, and the risks you should be aware of when using it.

What is a debit card?

A debit card is a payment card that allows you to spend only the money you have available in the linked account. When you make a payment, the amount is immediately deducted (or 'debited') from your available balance - hence the term 'debit' card.

How does it differ from a credit card and a prepaid card?

With a credit card, the issuing intermediary advances the money for your purchase, effectively lending it to you to repay later – usually the following month via direct debit. With a prepaid card,you can spend only the money you have previously loaded onto the card itself.

Why do we call it 'Bancomat'? Each card operates on a payment circuit. Bancomat was the first Italian circuit that enabled access to our funds via an electronic card and an Automated Teller Machine (ATM). Since then, 'Bancomat' has entered everyday language as a common term for both ATMs and debit cards.

Like other cards, the physical debit card contains a microchip and a magnetic stripe, and is made of plastic.

How to pay by debit card

To have a debit card, you must hold a payment account - typically with a bank or postal service. Usually, you do not need to request the card separately; it is provided when you open the account.

Important!

You can have a debit card only if you hold a payment account, that is, an account enabling basic payment operations: deposits and withdrawals, sending and receiving payments, and using payment cards. Such accounts can also be offered by entities other than banks, for example, Poste Italiane, payment institutions (PIs), and electronic money institutions (EMIs).

You can pay with your debit card at shops and online merchants that accept its payment network (for example, PagoBancomat). You can also withdraw cash at ATMs connected to the network (for example, Bancomat). Your card can be used for point-of-sale payments and cash withdrawals abroad if linked to international networks such as Visa or Mastercard. Outside the euro area, withdrawals will be made in local currency (e.g., pounds sterling in the UK), so be mindful of possible foreign ATM fees and currency conversion costs.

Usually, you will be required to enter a PIN code that only you know to pay or withdraw cash. This may not be necessary for contactless payments below a certain amount. For online payments, you also need to enter the CVV or CVC code (Card Verification Value or Card Validation Code), usually found on the back of the card.

Contactless payments are made by holding your card near a compatible POS terminal. You can also pay contactless via your smartphone or smartwatch if the card is registered on a payment app, effectively creating a digital wallet on your device.

Costs of debit cards

Typically, you can use your debit card without paying commissions for payments, but some costs may apply. The main ones include:

  • an annual fee (usually lower than for credit cards);
  • ATM withdrawal fees, for example if using a machine of a bank other than your own or if withdrawing abroad;
  • currency conversion fees if you pay in a currency other than the euro.

Risks

The main risks associated with debit cards are loss, theft, and cloning a type of fraud where someone copies your card details for unauthorised use. To protect yourself, we recommend:

  • never leave your card unattended;
  • if you have noted your PIN, do not keep it with the card;
  • activate real-time notifications for payments and withdrawals;
  • regularly check your account statement showing incoming and outgoing transactions;
  • if you spot transactions you do not recognise, immediately request the card issuer to block your card (usually via a dedicated phone number);
  • in case of theft, block your card immediately and report it to the Police or Carabinieri.

You can ask your bank to correct incorrect or unauthorised transactions and request reimbursement of any undue charges.

Another risk is overspending, as we tend to spend more when using cards rather than cash.

Why does this happen?

Because we treat money differently depending on the payment method - a behavioural bias known as 'mental accounting'. This cognitive bias often leads to irrational, emotional, or impulsive financial decisions, called 'behavioural traps' increasing the risk of impulsive spending.

When paying online with your debit card, ensure the website is secure. Look for the padlock icon in the browser address bar and 'https' before the web address - but be cautious, as scammers may replicate these signs on fake sites.

Finally, when making in-store purchases, always check the receipt or the notification on your phone to confirm that the charged amount matches what you authorised.

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