Electronic Payment Cards: The Different Types

Businesses today are expected to thrive through accepting payments electronically. Consumers no longer carry large amounts of money, and they no longer need to be physically present to purchase something. Using cards is a convenient method that allows customers to pay online. However, a wide range are used for monetary exchanges that depend on the nature of the business transaction and the agreement with the bank involved.

Generally, a payment device is supplementary to another account holding funds owned by, or offering credit to the cardholder. Depending on how the account is managed, payment cards can be classified into different types.

Credit cards

Credit is a function of a system of payments named after the small plastic card offered to the users of the system. It entitles the owner to purchase anything, given that it will be paid for over a period of time. The issuing bank of the card grants the consumer a line of credit, allowing him or her to borrow money for payment to a business or as a cash advance.

Credit cards differ from charge cards, where the latter requires the amount borrowed to be paid in full by the next month. The former lets the consumer ‘revolve’ the borrowed amount, at the cost of interest. These are usually issued by local banks and credit unions.

Debit cards

Debit cards, also known as a bank or a checkcard, offer an alternative payment to shopping with cash. Similar to an electric check, it allows funds to be withdrawn directly from the bank account, or the remaining balance on the card. For the basis of e-commerce, some cards are exclusively designed for the internet, and there is no physical card issued.

Debit cards are slowly growing in popularity throughout the world, and they have overtaken both check and cash transactions, based on studies conducted by the Federal Reserve. Similar to credit cards, they are widely used on the internet and on the phone. In contrast, the funds are transferred from the card holder’s account instead of paying the balance at a later date.

Debit cards can also act as an ATM card, allowing for the withdrawal of cash, and as a check guarantee card. Business owners also offer a ‘cashback/cashout’ option for customers, allowing for a withdrawal immediately following a purchase before checkout.

Stored-value cards

These refer to cards where the funds and/or data are physically recorded on the card. They differ from prepaid debit cards in that these are usually anonymous, while the prepaid debit cards are issued in the name of the card holder. The value associated with the card is accessed with the use of a magnetic stripe, on which the information is encoded.

Fleet cards

Used as payment in gas stations, fleet cards can also be used to pay for vehicle maintenance. Similar to all the other cards, this eliminates the need to carry a large amount of cash, therefore increasing security for fleet drivers.

Plastic cards are now becoming a replacement to cash and checks. Given this, businesses should continue to capitalize on this idea to ensure their success.

Pros and Cons of an Electronic Payment System

During this highly technological age, cash is trying hard to compete with electronic money, since nowadays a lot of people choose to use their virtual wallets. Here, you will read about the pros and cons of using an electronic payment system.

It is plain to see that electronic payment systems have more advantages than traditional banking services. Let’s see:

  • Saves on time

Money transfer from one virtual account to another may only take a few minutes, whereas a wire or postal transfer may take a number of days. Besides, you have to spend some time to go to the bank or post office and wait in line.

  • Controls expenses

Even if a person is willing to control his disbursements, it can take a lot of patience to jot down all the expenses, and this takes up a huge part of the total amount. On the other hand, the virtual account comprises the history of all the transactions, including the store name and amount spent. Best of all, you can check it whenever and wherever you like. In this case, an electronic payment system works to your advantage.

  • Reduced loss and theft risks

You will not make the mistake of losing or leaving your virtual wallet behind, and it can never be taken by robbers.

  • User- friendly

All services aim to reach out to a greater number of audiences and so, their interface should be easy for users to understand. Moreover, users can always ask help from the support team since they work 24/7. You can receive an answer by means of the forums as well.

  • Convenient to use

As long as you have access to the Internet, you can carry out transfers anytime, anywhere.

After discussing the advantages that come with using an electronic payment system, it is essential to talk about its disadvantages as well:

  • Restrictions

In every payment system, there is a limit with regard to the number of transactions you can do per day and the maximum amount you can withdraw.

  • Risk of Getting Hacked

Risks can be reduced when you follow the security regulations. This is comparable to the risk of being robbed. The situation can get worse when the processing company’s system breaks down, since this may lead to the leaking of confidential information on the online cards, as well as its owners. Though some electronic payment systems do not launch plastic cards, they can however be involved in Identity theft scandals.

  • The problem of money transfer from one payment system to another

Most of the time, electronic payment systems do not cooperate with one another. If that is the case, you can use e-currency exchange services. However, it can consume a lot of time when you do not have a service you can trust for this purpose.

  • Lack of Anonymity

Since the database of the payment system stores all your transactions – like the name of recipient, amount and time – the intelligence agency can access all your information. Decide on whether that is good or bad.

  • The Need for Internet Access

When you have no Internet connection, you cannot transact on your online account.

Apple Pay – Explore The Paramount By Electronic Payment Gateways

Digitization of payments has revolutionized the trade and contributors like Apple Pay play a major role in it. In fact, it is overwhelming for a startup business to determine which one plays the trick midst a plethora of Credit Card Processing Services. However, electronic payment processing these days is simple on the outbreak of numerous choices and options for availability of merchant account services. In addition, the flexibility offered in making electronic payments using a mobile phone helps in broadening the scope of operations.

Credit Card Processing Services – What You Ought To know

Processing credit cards is imperative for a startup business. Typically, small or medium-sized startups, Enterprises, B2B or B2G service provider require this facility. Good payment processing company offers numerous customized solutions to meet business specific needs and wants. However, you need a merchant account to accept credit card payments online or at a POS terminal. Certain advantages are

• Substantial revenue boost
• Unified payment processing
• Security
• Flexibility of operations

However, integration of innovative payment processing technology like Apple Pay adds the cutting edge leverage to the business. The scope of various merchant services offered by the business can expand exponentially upon such successful integration.

How Things Work – Why You Need To Know?

The paradigm of credit card processing revolves around verticals like merchant, merchant’s acquiring bank, cardholder, cardholder’s issuing bank, and association of the card. Payment processing gateways like Apple Pay eliminate many verticals from this association due to innovation. On the other hand, a typical Credit Card Processor mechanism requires the engagement of all these verticals. Accepting credit cards is common these days. The steps involved in such credit/debit card authorization transaction are

• Cardholder pays the merchant
• Merchant’s acquirer bank sends the payment information to card network
• Card network sends the information to cardholder’s issuer bank
• Cardholder’s issuer bank sends approval
• Card network returns to merchant’s acquirer bank with payment approval

Merchant Account Processing through this gateway is lightening fast and payment processing requires merely a second or two.

Merchant Services And Their Indispensible Role – Is A Replacement Possible?

Financial service providers or banks that provide card payment acceptance and processing facility to a merchant are termed as merchant services. However, small business merchant services mandate acquiring a merchant account to begin accepting the payments. In addition, merchant services govern the merchant account rate. Therefore, the entire scope of entering into a minimum processing fee account solely depends upon finding the right Merchant Processing Account. Processors like Apple Pay or other third party payment processors eliminate the need for merchant services or processing account by operating on a parallel channel.

Understanding the imperatives of E-commerce is very essential to make the most of it. Many unparalleled service providers apart from the conventional credit card processing services help in expanding the horizon by offering competitive rates and better flexibility. Therefore, look for possible solutions available online for a rugged boost to your E-commerce before entering into an agreement. Service providers like Apple Pay do have unparalleled solutions that you need today to survive and thrive.