UP to 10 Irish financial institutions will start to launch debit cars for customers from April.

About 750,000 bank and building society customers and 5,900 retailers are expected to be using electronic direct payment cards within a year.

Debit cards can be used in retail outlets such as shops, supermarkets, petrol stations and restaurants to pay for goods and services and customers can withdraw cash from their accounts at the same time as they pay for goods.

The amount spent or withdrawn is debited from the customers account within one to two days. They differ from credit cards in that customers must have funds in their accounts or an agreed overdraft facility to use the card.

With credit cards, customers are given up to 56 days to pay for purchases made with their cards.

Pilot testing of the new card by Laser Card service, the company set up by AIB and Bank of Ireland to develop and test a card, have shown strong interest. Run in Bray, Waterford, Wexford, Enniscorthy, New Ross and Greystones, the pilot scheme found a very strong take up of cards by bank customers.

The cards were popular with both customers and retailers because they reduced the need to hold or carry cash.

Over a half of the 20,000 bank customers who were offered cards took up the offer within six weeks. Some 400 retailers were involved in the pilot study.

The card is aimed at reducing the use of cheques by providing a more convenient means of payment for customers and retailers and at cutting queues at automated teller machines.

While AIB and Bank of Ireland developed the scheme, eight other financial institutions have been invited to join either as card issuers or as retailer supporters.

All of the eight - National Irish Bank, Ulster Bank, TSB, Irish Permanent, ACC, EBS, First National and Irish Nationwide - are understood to have decided to become card issuers.

Only the main banks are expected to become retailers supporters as well as card issuers. Being a retailer supporter involves assisting the retailer to put in the expensive technology involved in processing transactions and operating collection and settlement arrangements.

The launch of the cards is expected to begin in April in the Dublin area with nationwide coverage expected by the end of the year.

In Britain last year, debit cards overtook credit cards in terms of high street spending and their use is growing faster than credit cards in other areas in terms of the number of transactions and the volume of spending.

The increase in the use of debit cards came at the expense of personal cheques.