Debit cards are seen to be a replacement for cheques.  It is a good idea to look at what the advantages and disadvantages that debit cards have over cheques.

The first advantage of a debit card is that it can be used in a wider variety of places.  Where cheques are very handy for mail order catalogues and they can be used for face to face transactions, debit cards can also be used over the internet and for telephone ordering.

Another advantage of a debit card over cheques is that debit cards are easier to carry around.  This may sound simple but it is actually very important.  Most people will make sure that they have their debit card in their wallet and that they do not leave their home without a debit card, but they will not do the same with a cheque book.

Fraud is also harder with a debit card, particularly if there is a chip and pin system on the debit card.  There is also a zero liability guarantee on most debit cards which there is not on cheques.  This will mean that if there are unauthorised transactions on the card then they will not be charged to the card user’s account as long as they are reported in time and the card user does not contribute to the card being misused, by for example giving the card out.

It is harder to make a mistake with a debit card.  This is another very simple point which is actually quite important.  Common mistakes with cheques include putting in the wrong year on the dates or to have one signatory when two are required.  These mistakes can invalidate cheques.  There are simply fewer opportunities to make these mistakes with debit cards.

It is also easier to run out of cheques, and harder to get them replaced than it is with a debit card.  However debit cards can become outdated reasonably quickly.

Debit cards are free to use for a bank account holder.  They are paid for by a merchant fee.  Cheques are usually charged per cheque, or with some transaction accounts they have a certain amount of cheques that can be written in a month.

Cheques have one advantage in that they are more commonly accepted by individuals or very small businesses.  However the growth of pay pal has given debit cards more reach in these areas.