Practically there are several reasons why
people have shifted to credit and debit cards from cash payments. First, it is
next to impossible to carry huge amounts of cash in your wallet, due to risk of
robbery. Second, it is not always mandatory to have an ATM just when you think
you need funds. Moreover, spending with cash puts a limit on your expenditure,
which does not allow you to spend the way you want to. In addition, almost all
the retails shops now accepts credit and debit cards payment, so using cards
for payments is indeed a great way to spend on things you like.
But for the merchants who accepts credit card
payments, should know the entire credit card
payment processing. The processing starts when a consumer swipes the
card in the card terminals, and enters the amount that the merchant deserves to
pay. The device transmits the data on the consumer card to the appropriate
financial institution and the money on the consumer accounts get shifted to the
merchants account.
How the credit card payments process?
Credit card
payment processing is
not free to the merchant where the consumer is wiping his card. Each merchant
have to pay a stipulated amount to the third party that links the merchant with
the financial institutions. Depending on the third party, these charge can
varies, but normally one or two percent of the amount was charged per
transaction.
The amount takes time to enter the merchants
account when a payment is done by credit cards. Because of the delay in the
procedure, most of the times, merchants deny to take credit cards. Merchants
have to wait at least 14 to 20 days to get the money in their account as the
banks cannot pay the amounts to the merchants until the clearance. Due to the
long wait for card
payment processing, merchants often charge the customer with a
convenience fee. However the convenience fees that the merchants charge from
the consumers are quite low.
The debit card payment processing
Consumers those who pay with their debits
card have to pay the merchant a minimum amount before the store accepts their
payment via debit cards. The reason behind this is, often banks and financial
institution often charge an amount from the merchants for the debit
transactions. So, at most times, consumer using their debit cards pay a trifle
sum to the merchants to process their payments via debit cards.
In most of the debit and credit card
payments, the cardholder needs to enter a pin in the terminal in order to
access the funds in the account. These pin numbers are known only to the card
holders, and are used so that the card holder can protect the card from
unauthorized use. Whenever you are swiping either your debit card or your
credit card after a shopping in a retail store
, never disclose your pin to the
cashier and make sure you keep the pin safe.
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