PIN debit transactions require that the cardholder use a PIN. A PIN pad must be located at the POS for cardholders to enter their PIN to authenticate their identity and to authorize the transaction.
A PIN debit transaction removes funds from the cardholder's checking account almost immediately as the authorization and the settlement of the transaction is a one step process. The payment itself is processed over Electronic Funds Transfer (EFT) networks, which is the same way an ATM transaction is handled. STAR, NYCE and PULSE are all well-known EFT networks.
Online debit cards require electronic authorization of every transaction and the debits are reflected in the user’s account immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine (ATM) cards. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing lag on transactions that may have been forgotten or not authorized by the owner of the card. Banks in some countries, such as Canada and Brazil, only issue online debit cards.
In the United States, most online debit transactions are handled by regional ATM networks, though VISA and MasterCard each own online debit networks (Interlink and Maestro, respectively). Online debit is usually provided as a secondary feature on an offline debit card (Visa Check Card or Debit MasterCard); those customers that do not qualify for offline debit cards are often issued ATM cards with online debit capability through the regional ATM, Interlink and/or Maestro networks.