Debit cards are one of the most popular ways to pay for items and services, and it is possible to pay using only a signature as security. Signatures are, however, a very weak form of security with debit cards because, if a debit card goes missing, the signature can be easily forged, and it is possible to pay for many items using only a signature and the card.

In order to close this security loop-hole, there are procedures applied by debit card providers and processors to make all debit card transactions (made by a customer in person, rather than online or by phone) to be completed with the chip and pin standard.  This is when a debit card has a four digit pin number that can be used with the debit card instead of a signature, known only to the customer.  The pin number is entered through a key pad that is next to the till.  The pin numbers can be the same as the numbers used with the debit card in an ATM, although this is not always the case.

The advantage with this method is that it makes debit card fraud more difficult, because any individual who attempts to use the card fraudulently will not be able to do so unless they also have the pin number.  Both VISA and MasterCard intend to have the system in place by the end of 2015, throughout Australia.  This will mean that all cards will be re-issued and that the debit card users will need to remember their debit card pin numbers.  In the UK, where the chip and pin system is already in place, the incidence of card fraud has dropped by more than 80%.

It is often thought that online transactions can be quite vulnerable to debit card fraud because online transactions rely on the numbers on the debit card.  There is, however, a growing use of verification programs, which mean that before a debit card transaction can be verified online, the customer is taken to another screen to enter a verification code that is not on the card, and is known only to the card holder.

If a customer is victim to debit card fraud, they will usually be able to make a claim under a zero liability guarantee.  This means that any unauthorised transactions on the debit card will not be charged to the debit card user.