Payment Cards

Also known as credit, debit, or charge cards, payment cards are one of the means by which consumers make payments both in traditonal commerce and e-commerce. Each has its own advantages and disadvantages, but are all widely popular.

Credit cards are a form of payment card that have a spending limit base on the credit history of the person using the card, along with an interest rate on any balance that remains unpaid.  The biggest issue with using credit cards is that there is no way to prove the identity of the person using the card online, so someone who loses their card can have a ton of charges rung up without knowing who did it.

Debit cards look like credit cards, but often are set up so that a consumer can only charge to the card the amount of money in their account.  They still carry the label of one of the major credit card companies, but mainly so that the consumer knows they can use the card at stores that accept their type of card.

Charge cards have no spending limit, but whatever was charged to the card is to be payed at the end of the billing period.  Some stores and gas stations have their own charge cards, but the major supplier of charge cards is American Express.

One of the biggest advantages when using a payment card is the fact that they are so widely accepted, with only some limitations.  Plus, it is much easier to carry one card around rather than having a huge stash of cash in your pocket.  However, there are various fees that can add up when using payment cards, and if you go over your balance, you can incur overdraft fees that can snowball very fast. 

When accepting and processing orders by payment card online, the company must make sure that the person whose information has been entered has actually entered it, then make sure that there are sufficient funds for the transaction to take place.  If all is correct, the bank that the card is through sends the funds to the company who the customer ordered through. To accept payment cards on an e-commerce site, the business must have a merchant account with a bank.  When an order is placed online, the bank will receive the receipts from the company and charge the amount to their account.  There are various programs and companies who process payment card transactions online.

Stored-Value Cards

Another payment option is the use of a stored-value card, in which the consumer can make a purchase online and the order will be processed through a microchip on the card, rather than having to be processed by a bank or other third-party company. They have been slowly showing up in the U.S., one of the first instances is out in San Francisco.  Commuters can use the card to benefit from the various means of transportation all with just one card, as well as add to the balance on the card.  Another use of stored-value cards is that Target has their own card that can be used both in-store or online and the amount of the purchase will be automatically deducted as soon as the customer finalizes it.  The card can be used just like a Visa card in other stores, adding to its versatility.

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