Types of Payment System
All debit cards, regardless of the bank or building society with which you bank, are associated with one of the four payment systems in the UK. These are: Maestro, Solo, Visa Debit and Visa Electron. Which payment system your debit card uses is largely irrelevant, as the services provided are very much the same. However, there are underlying differences in the way that transactions are processed, and some retailers may not accept all types of payment system; Solo and Visa Electron are not as widely accepted as their Maestro and Visa Debit counterparts. The type of payment system your debit card uses depends on the type of current account you have, and to some extent, your credit history and income. For more details see Payment Systems.
The biggest difference between payment systems is the way in which they process transactions. Solo and VISA Electron cards will electronically confirm that you have the required funds in your account before proceeding with each transaction. If your current account balance does not cover the transaction, the transaction is declined at the point-of-sale. The debit card reader is connected to the banking network and can therefore verify the up-to-the-minute status of your current account balance. This type of live, electronic verification is referred to as online authorisation. It is best suited to debit card holders who wish to avoid debt and additional charges, as the transaction is simply declined, and there is no attempt to request an informal loan to honour the transaction from your banking institution. Example customers include the elderly, who may rely on a limited income, and children, who may receive limited funds from their parents.
Maestro and Visa Debit cards use offline authorisation, which does not require each transaction to be electronically verified. This means that these cards may be used to make payments or withdrawals that exceed the available funds. Most current accounts that have overdraft facilities will use offline authorisation, as they give account holders the flexibility to borrow small sums of money from their bank or building society if their current balance does not cover a transaction.
