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Debit and Credit

Card Security
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Debit card
A debit card is a payment card that is linked to a checking
or savings account and allows cardholders to make
purchases and withdraw cash from ATMs. When a
purchase is made using a debit card, the funds are
immediately deducted from the linked account. Debit
cards can be used to make purchases at merchants that
accept them, online purchases, and for withdrawing cash
from ATMs.
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Major features
Debit cards have several features that make them a popular choice for making payments and
withdrawing cash. Here are some common features of debit cards:

 Linked to a Bank Account: Debit cards are linked to a checking or savings account, allowing
cardholders to access funds in their account to make purchases and withdraw cash.

 PIN or Signature-based Transactions: Debit cards can be used for transactions using a PIN
(Personal Identification Number) or signature-based system, depending on the merchant's
preference.

 ATM withdrawals: Debit cards can be used to withdraw cash from ATMs, often with a daily
withdrawal limit.

 Online and In-store Purchases: Debit cards can be used to make purchases online and in-
store, with many merchants accepting them as a form of payment.

 No Credit Check: Debit cards do not require a credit check since the cardholder is using
their own funds to make purchases.
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 No Interest Charges: Unlike credit cards, debit cards do not accrue interest charges since
purchases are made using the cardholder's own funds.

 Overdraft Protection: Some debit cards offer overdraft protection, which allows cardholders
to overdraw their account up to a certain limit, often for a fee.

 Fraud Protection: Debit cards typically offer fraud protection that limits the cardholder's
liability for unauthorized transactions.

 Rewards Programs: Some debit cards offer rewards programs, such as cashback or points,
for using the card for purchases.

 Contactless Payments: Many debit cards now offer contactless payment options, allowing
cardholders to tap their card to pay for purchases instead of swiping or inserting the card.

Overall, debit cards are a convenient and secure way to make purchases and withdraw cash,
providing easy access to funds in a linked bank account. It is important to monitor account
balances and transaction activity to avoid overdraft fees and detect any fraudulent transactions.
 Security threats associated with debit card
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Debit cards, like any financial instrument, are vulnerable to security
threats that can compromise cardholder information and result in
fraudulent transactions. Here are some common security threats for
debit cards:

Skimming: Skimming is the act of stealing debit card information by

attaching a device to an ATM or card reader that reads the card's
magnetic stripe. This information can then be used to create a
counterfeit card or make unauthorized purchases.

Phishing: Phishing is a scam where a criminal poses as a legitimate

entity to obtain sensitive information, such as debit card numbers,
passwords, and other personal details. This can be done through
fraudulent emails, websites, or phone calls.
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Vishing: It is one of the method of social engineering over the telephone
system, most often using features facilitated by Voice over IP (VoIP), to gain
access to private personal and financial information from the public for the
purpose of financial reward. The term is a combination of “voice” and
“phishing”.

Card Theft: Debit cards can be physically stolen, allowing criminals to use
them to make unauthorized purchases or withdraw cash from ATMs.

Social Engineering: Social engineering involves gaining trust hence the

fraudster poses as a member of staff or even security guard. The fraudster
would then ask the customer to check the card for damages. The fraudster
would have gained confidence from his prey using various tactics such as
offering assistance to the customer who perhaps would have tried to use the
ATM without success or perhaps the customer who is not familiar with use of
ATM machine and requires assistance.
Malware:zMalware is a type of software designed to damage or
disable computer systems. In the case of debit cards, malware
can infect ATM machines or online banking systems, giving
criminals access to sensitive information.

Weak Passwords: Weak passwords can make it easy for

criminals to gain access to online banking accounts linked to
debit cards, allowing them to make unauthorized transactions.

Card Cloning: Card cloning is the process of copying the

information from a debit card's magnetic stripe onto a
counterfeit card. Criminals can then use the cloned card to
make purchases or withdraw cash from ATMs.
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Safety measures
To protect against these security threats, debit card users should take several steps to safeguard
their information, such as:
 Keep Your Card Safe: Keep your debit card in a secure location and do not share your PIN or
other sensitive information with anyone.
 Monitor Your Account: Regularly monitor your account for any suspicious transactions and
report any unauthorized activity to your bank immediately.
 Use Strong Passwords: Use strong and unique passwords for online banking accounts linked
to your debit card, and do not share them with anyone.
 Be Careful with ATMs: Use ATMs located in well-lit and secure areas, and check for any signs
of tampering or skimming devices.
 Use Two-Factor Authentication: Consider using two-factor authentication for your online
banking account to add an extra layer of security.
By following these tips and staying vigilant, debit card users can protect themselves against
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Credit card
A credit card is a plastic card that allows the holder to borrow money
from a financial institution, up to a certain limit, to make purchases or
withdraw cash. When using a credit card, the cardholder is essentially
taking out a loan, which must be repaid along with interest and any
fees that may apply.

Credit cards are widely used for convenience and security in making
purchases, both in-person and online. They often come with benefits
and rewards, such as cash back, points, or airline miles etc., However,
one has to take proper care while using them, as they can lead to
certain risks.
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Risks
 High interest rates on unpaid balances

 Loss or theft

 May lead to debt

 Cyber Security risks

It is necessary digital users are aware of uses, threats and safe

online practices to be followed while using Debit/Credit cards for
payments.
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Features
The major features of a credit card include:

Credit Limit: It is the maximum amount of money that can be borrowed. This limit is determined by the card
issuer based on the individual's creditworthiness and income.

Annual Percentage Rate (APR): The APR is the interest rate charged on the outstanding balance on the
credit card.

Grace Period: The grace period is the time during which the cardholder can pay the balance in full without
incurring any interest charges.

Rewards and Benefits: Many credit cards offer rewards programs, such as cash back, points, or miles, for
using the card to make purchases.

Security: Credit cards come with security features like fraud protection, zero liability for unauthorized
transactions, and the ability to dispute fraudulent charges.

Credit Score Impact: User’s credit score is effected by usage of the card based on factors like payment
history, credit utilization, credit history etc.,
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Advantages of a Credit card
Credit cards offer several advantages to cardholders, including:

 Convenience: Credit cards allow for quick and easy transactions both online
and in-person, without the need to carry cash.

 Building Credit: Using a credit card responsibly and paying off balances on
time can help build a positive credit history, which can be beneficial for future
borrowing and financial opportunities.

 Rewards and Benefits: Many credit cards offer rewards programs, such as
cash back, points, or miles, for using the card to make purchases. Some credit
cards also offer benefits like travel insurance, purchase protection, and
extended warranties.
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 Improved Cash Flow: Credit cards allow for purchases to be made immediately, even if
the cardholder does not have sufficient funds at the time. This can improve cash flow
and allow for important purchases to be made when necessary.

 Fraud Protection: Credit cards come with security features like fraud protection, zero
liability for unauthorized transactions, and the ability to dispute fraudulent charges,
which can protect the cardholder from financial loss.

 Purchase Protection: Some credit cards offer additional protection for purchases made
with the card, such as extended warranties or protection against theft or damage.

 Emergency Funds: Credit cards can be used as a source of emergency funds when
unexpected expenses arise.

It is important to note that these advantages only apply when credit cards are used
responsibly, with regular payments made on time, and balances kept low. Otherwise,
credit cards can lead to debt and financial difficulties.
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Disadvantages of Credit card
Credit cards also have several disadvantages that cardholders should be aware
of, including:

 High-Interest Rates:Credit card interest rates can be very high, especially for
those with lower credit scores or who carry a balance from month to month.
This can lead to significant interest charges and make it difficult to pay off the
balance.

 Debt Accumulation:Credit cards can make it easy to overspend and

accumulate debt, especially if the cardholder does not pay off the balance in
full each month.

 Fees:Credit cards often come with fees, such as annual fees, late payment
fees, cash advance fees, balance transfer fees, and foreign transaction fees.
These fees can add up quickly and make the card more expensive to use.
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 Credit Score Impact: Late payments or high balances on credit cards can negatively
impact the cardholder's credit score, which can make it harder to get approved for
future credit and loans.

 Temptation to Overspend: Credit cards can create a false sense of security and
encourage overspending, leading to financial difficulties and debt.

 Fraud and Identity Theft: Credit cards can be subject to fraud and identity theft,
which can be costly and time-consuming to resolve.

 Minimum Payments Trap: The minimum payment required on a credit card is often
low, which can create the illusion that the balance is manageable. However, making
only minimum payments can lead to a cycle of debt accumulation and interest
charges.

It is important for cardholders to be aware of these disadvantages and use credit cards
responsibly to avoid debt and financial difficulties.
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Modus Operandi
Mode of Operation of a Credit/Debit card fraudster might involve stealing the
card information through phishing emails or phone calls, using skimming devices
to collect credit card data from ATMs or gas pumps, or hacking into computer
systems to access credit card databases. Some of the methods include:

 Identity Theft: Credit cards can be a target for identity thieves who steal
personal information, such as card numbers, to make unauthorized
purchases or open new accounts.

 Fraudulent Charges: Credit card fraud occurs when a criminal uses a stolen
credit card number to make unauthorized purchases. Cardholders may not
realize their card has been compromised until they receive a bill with charges
they did not make.
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 Phishing Scams: Phishing scams involve criminals sending fake emails or text
messages that appear to be from a legitimate source, such as a credit card issuer. The
messages often ask for personal information or direct the recipient to a fake website
where they are asked to enter their login credentials or credit card information.

 Skimming: Skimming involves thieves installing a small device on card readers, such
as those at gas pumps or ATMs, to capture credit card information from unsuspecting
cardholders.

 Lost or Stolen Cards :If a credit card is lost or stolen, it can be used by anyone who
finds it to make unauthorized purchases.

 High-Interest Rates and Debt: High-interest rates on credit cards can lead to debt
accumulation and financial difficulties for cardholders who carry a balance from month
to month.
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How to secure a Credit card
Securing a credit card requires taking several steps to protect the card and the cardholder's
personal and financial information. Here are some tips for securing a credit card:

 Use Strong Passwords: Use strong and unique passwords for online accounts, including
credit card accounts. Avoid using easily guessable information such as your name or
birthdate.

 Sign the back of your Card: Sign the back of your credit card as soon as you receive it to
prevent anyone else from using it.

 Monitor your Account: Regularly monitor your credit card account for any suspicious activity,
such as unauthorized charges or changes to your account information. If you notice anything
unusual, contact your card issuer immediately.

 Be Careful with your Card: Keep your credit card in a secure location and avoid using it on
unfamiliar or suspicious websites. Never give out your credit card information to anyone you
do not trust.
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 Use Two-Factor Authentication: Consider using two-factor authentication for your

credit card account to add an extra layer of security.

 Sign Up for Fraud Alerts: Many credit card issuers offer fraud alerts, which will
notify you if there is any unusual activity on your account. Sign up for these alerts
to stay informed and respond quickly if needed.

 Use Secure Websites: When making online purchases, only use secure websites
with "https" in the URL and a padlock icon in the address bar.

 Check your Credit Report: Check your credit report regularly to ensure there are
no unauthorized accounts or activity associated with your credit.

 Report Lost or Stolen Cards Immediately: If your credit card is lost or stolen, report
it to your card issuer immediately to prevent unauthorized charges.

By following these tips, cardholders can help to secure their credit card and prevent
fraud or unauthorized use of their account.
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What is UPI payment?
 The Unified Payments Interface (UPI) is a digital and real-time payment system
developed by the National Payments Corporation of India (NPCI) and regulated by
the Reserve Bank of India (RBI).

 Launched on April 11, 2016, UPI became the most popular payment method in the
country, and it is projected to account for 90% of the total transaction volume in retail
digital payments from 2023 to 2028.

 Unlike traditional methods, UPI simplifies transfers using the recipient's UPI ID, be it
a mobile number, QR code, or Virtual Payment Address, eliminating account
numbers.

 A consistent UPI transaction PIN across apps enhances cross-operability, enabling

24/7 transactions. This payment method also serves as an open-source API for
various mobile payment apps, connecting banks, merchants, and users for swift
transactions.
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 UPI operates as a digital public infrastructure, allowing

seamless interactions for all players, including merchants and
customers, without transaction costs. Its centralized design
reduces reliance on individual banks, while RBI's market share
caps encourage competition.
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How UPI Works?

Unified Payments Interface (UPI) is a system that powers multiple bank accounts
into a single mobile application (of any participating bank), merging several
banking features, seamless fund routing & merchant payments into one hood. It
also caters to the “Peer to Peer” collect request which can be scheduled and
paid as per requirement and convenience. Each Bank provides its own UPI App
for Android, Windows and iOS mobile platform(s).
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How to get it:

 Bank a/c

 Mobile number should be linked with bank a/c

 Smart Phone with internet facility

 Debit Card for re-setting MPIN.

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Service Activation:

 Download the App for UPI

 Do registration online on the App with a/c details

 Create a virtual ID

 Set MPIN

 5-7 minutes
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What is required for Transaction:

 Smartphone with internet facility

 Registered device only

 Use registered MPIN

 Self Service Mode

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Transaction Cost:

 NIL to customer by most Banks

 Customer pays for data charges

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UPI and security

The recent launch of new products by NPCI has increased the

importance of implementing robust security measures. The
new gamut of products, such as Credit Line on UPI, UPI LITE
X, Tap & Pay, and Hello! UPI: Conversational Payments on
UPI and BillPay Connect: Conversational bill payments are
designed to build an inclusive, resilient, and sustainable digital
payment ecosystem. According to the Reserve Bank’s Annual
Report 2022–23, the number of frauds in the banking sector
increased year-on-year to 13,530 last year.
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Ways to secure UPI

The bedrock of UPI’s security architecture lies in its multi-

factor authentication system. When you set up a UPI
account, you link it to your mobile number, bank account,
and a UPI Personal Identification Number (UPI-PIN). This
multifactor authentication ensures that only the account
holder can initiate transactions, thus mitigating the risk of
unauthorised access. Moreover, each transaction requires
a UPI-PIN, acting as an additional layer of security.
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Ingenious cybercriminals can intrude on even the most

sophisticated security measures. Users need to stay vigilant and
informed about potential threats. Phishing attacks, where
fraudsters pose as trusted entities to obtain sensitive information,
are one of the most common risks associated with UPI. These
malicious players send deceptive emails, messages, or calls,
urging recipients to share their UPI-PIN or other personal
information. To combat such threats, users must exercise caution
and verify the authenticity of any communication requesting
sensitive data.
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Another prevalent threat is malware and spyware

designed to compromise your device’s security. These
malicious programmes can intercept your UPI
transactions and steal confidential information.
Regularly updating your device’s operating system and
using reputable antivirus software can help safeguard
against such threats.
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Moreover, it is essential to use a secure and reliable UPI

app provided by a reputable bank or financial institution.
These apps typically undergo rigorous security testing and
are equipped with encryption technology to protect your
data during transmission. Avoid downloading UPI apps
from unofficial sources or using third-party applications
that may compromise your security.
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NPCI and banks have also been proactive in enhancing

UPI security. They employ advanced fraud detection
systems that analyse transaction patterns to identify
and flag suspicious activities. Furthermore, they have
implemented strict Know Your Customer (KYC)
procedures to verify users’ identities before they can
transact on the UPI platform.
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As technology continues to evolve, so do the tactics of

cybercriminals. Hence, users must educate themselves
about emerging threats and stay updated on security.
Also, promptly reporting any suspicious activity to your
bank or the relevant authorities can play a significant
role in avoiding cybercrime.