What is the main difference between a PIN-based debit card and a signature-based debit card?

The main difference between a PIN-based debit card and a signature-based debit card lies in the security method utilized during transactions. A PIN-based card requires the cardholder to enter a personal identification number (PIN) when making purchases. This PIN serves as an additional layer of security, ensuring that only the authorized user can complete the transaction. This method is commonly used at point-of-sale terminals and for ATM transactions, effectively linking the card to the cardholder through the input of a secret number.

In contrast, signature-based transactions typically involve the cardholder providing a signature instead of entering a PIN, which may be less secure. While both card types are linked to the same bank account, the PIN provides a unique identifier for the transaction that is not possible with a signature alone.

Understanding this key distinction is essential for recognizing how different debit card systems operate within the broader landscape of electronic transactions and consumer security.