Credit Card Transaction And Why Customers Should Give Emphasis On It Instead Of Debit Cards

Credit card transaction is changing the ecosystem of online payment. COVID-19 has changed the lifestyle of the people. Social distancing has become compulsory and therefore people are giving more importance to online shopping. On the other side, merchants have closed retail outlets due to the coronavirus pandemic. There are many Americans that have already lost their jobs. As a result, credit card companies are cutting the credit card limit. However, it does not mean that people have stopped using credit cards to make online bill payments.

Standing in the 21^st century, it is very important to understand the functionalities of the advanced payment terminals. Otherwise, consumers will not be able to make an online credit card payment. It will be a bad move for the merchants if they don’t embrace the technology amid such a critical situation. Credit card transaction is very flexible and this is why the popularity of such transaction is increased rapidly.

We at International Payment Solutions understand the current situation very well. Our team is trying our best to provide the proper guidance to our merchants. We have elaborated the credit card transaction process below. If you want to keep yourself ahead of your competitors, you must go through the following points:

Credit Card Transaction Process

If you are into online business or making an online credit card payment, you are familiar with the fact that credit card transaction is a real-time process. The process is as follows:

The credit cardholder generally puts the credit card details in the online marketplace. The online payment gateway then checks the data and sends it to the merchant processor. The merchant processor sends the details to the respective credit card brand. The brand can be anything such as Visa, MasterCard, Capital One, and many more. It depends upon the brand that the cardholder is using to make the credit card payment online.

However, after getting the credit card details from the merchant processor, the credit card company checks the details. Then, it sends the same information to the credit card issuing financial institution. The bank then verifies the information and checks the available credit. Depending upon the credit, the bank approves the credit card transaction. If there is not enough credit, the transaction gets declined automatically. Sometimes, due to the network issue, the credit card transaction gets declined. However, that is a different scenario.

After providing approval, the bank sends the same information to the credit card network. The network then sends the same information to the merchant processor solution. So, this is how the process is completed.

Well, if you are starting your online business, you must understand the different types of credit card processing rates. It will help you to run your business smoothly. You can gain a good amount of profit from your business.

We at International Payment Solutions go with interchange plus pricing structure. It maintains the transparency between the merchants and the credit card processor. The merchants can understand the different types of credit card processing rates. However, there is another processing rate used by the most renowned credit card processor. It is called a flat-rate processing rate. It offers a fixed rate for each credit card transaction. If you have a new business where the number of online credit card transaction remain low, you can go with the flat rate pricing structure.

Advantage Of Using Credit Cards

Well, credit cards and debit cards have already changed the ecosystem of online payment. But, if we talk about the functionalities, you will see many differences. A credit card comes up with endless benefits. We have highlighted some of them below:

• The cardholders can carry a specific balance. If they make any purchase, the amount will be debited from the credit balance. On the other side, if anyone makes a debit card purchase, the amount will be debited directly from the bank account.

• In the case of a debit card transaction, there will be a limit. The cardholder will have to make a purchase within the available funds in the bank account. But, in the case of a credit card transaction, the limit remains on the higher side. If the cardholder can maintain a good credit score, they can increase the credit limit.

• There is a fraud liability guarantee in case of a credit card transaction. You will not be responsible for any unauthorized credit card transaction.

• A credit card transaction can help you to improve your credit score. If you have a good credit score, you can apply for a new credit card as well.

Not An IPS Merchant?

By now, you have probably understood the importance of using credit cards. Now, if you want to accept credit card transaction in order to elevate your business to the next level, you must get in touch with IPS that is a renowned payment processor. It offers advanced payment equipment that will help you to increase the cash flow in your business. So, don’t just wait, become a merchant of International Payment Solutions today.

Start accepting credit card online and/or in your store today! , Fill out the below form for a free consultation, we will get back to you shortly: