Learn how debit cards work in online transactions

Debit cards are fast becoming one of the most popular ways to pay for online transactions. Why the change and what is the difference between this and the EFTPOS system?

In the early days of Internet shopping people would use either credit cards or the EFTPOS system. Although you can still in come cases use EFTPOS to make online purchases, very few companies accept this form of payment.

One of the big reasons vendors do not like this system is because it can only actually be used by Australians. Therefore any companies abroad would have to jump through many hoops in order to accept this kind of payment method.

Something that also hindered the use of the EFTPOS system, was that many websites use special shopping cart software in order to accept online transactions, and most of the software available was not compatible with the system, meaning many vendors stopped using it.

Compare debit cards today

Rates last updated September 19th, 2018
Name Product Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly Account Fee Product Description
NAB Classic Banking
$0 monthly account fees and $0 overdrawn fees.
Temporarily block and unblock your card at the touch of a button in the NAB app if you lose it. Tap and pay with your NAB Visa Debit card, NAB Pay for Android or NAB PayTag for iPhone.
ING Orange Everyday Account
$75 cash bonus.
$0 monthly account fees.
Receive a $75 cash bonus if you open a new Orange Everyday account, enter the promotional code and deposit at least $1,000 within a calendar month and make 5+ card purchases (T&Cs apply). Get a competitive ongoing variable rate when linked with an ING Savings Maximiser.
MyState Everyday Account
A flexible option for day-to-day spending.
$6 waivable monthly account fee.
Monthly account fee waived if you deposit at least $2,000 a month or are 23 years or under. Apple Pay, Google Pay, Samsung Pay available.
HSBC Everyday Global Account
No foreign ATM or transaction fees.
$0 monthly account fee.
Enjoy no minimum ongoing balance or transaction requirements and the flexibility to hold up to 10 currencies. Apple Pay and Google Pay available.
NAB Classic Banking with Platinum Visa Debit Card
$10 cashback on contactless purchases, $0 foreign transaction fee and complimentary travel insurance.
$10 monthly account fee.
Receive $10 cashback when you spend $1000 on contactless purchases. Complimentary travel insurance, transport accident insurance, purchase protection insurance and more when you meet eligibility criteria.

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What about credit cards?

Credit cards, and debit cards are the main forms of online payment methods. Although in the early days the credit card was the most commonly used form of payment, it would now seem that debit cards are rising in popularity.

One of the main reasons is because using a debit card for online transactions can potentially be a much cheaper way of making purchases.

Like anything that you spend on your credit card, your purchases will be subject to an interest charge if your balance is not fully repaid at the end of your interest free period. In a very short space of time your balance can increase, and reach a level where you will not be able to pay your full balance in time, and so will begin amassing interest.

This means anything you paid for using your credit card could start going up in cost to you!

Learn more about credit cards.

Why debit cards?

The beauty of the debit card is that it is linked to your bank account and you are only ever able to spend what is available to you in your account.

Unless you have an agreed overdraft with your lender, any purchase you attempt to make with your debit card will be refused if there is not sufficient funds available, and an alternative form of payment will be asked for.

This makes it much easier to stay in control of your spending.

Credit giants Visa and Mastercard are both in charge of processing both credit and debit card transactions, so whichever you use should have the same security benefits as the other.

One thing is for certain, when compared to the EFTPOS system, and credit cards, the debit card is becoming the most common way to pay for your online transactions.

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