Essay On Payment Cards

Payment cards-Meaning

A Payment card is an instrument or device that enables the cardholder (in some cases only the owner) to make a payment by means of electronic funds transfer. In simple terms, electronic fund transfer is a system where money is transferred directly from one bank account to another without any paper money transactions. Payment cards are usually embossed or magnetic striped plastic cards. In most cases, a payment card is electronically linked to an account or accounts belonging to the card owner. These accounts may be deposit accounts in a bank or loan or credit accounts, and the card is a means of authenticating the cardholder. In such cases, the card directly deducts money from a customer’s account to pay for a purchase. However, stored-value cards store money on the card itself. The most common types of payment cards are credit cards and debit cards.

Payment cards include debit cards, credit cards, prepaid / stored value cards, smart cards, ATM cards and Private label Cards. Payment through cards can be done either face-to-face where the card is present

Debit cards are processed through an EFT or ATM network upon the customer entering a personal identification number, or PIN, at the time of the initial transaction. Debit cards are similar to credit cards except that debit cards pull money out of the account. Debit cards do not create or increase a loan like credit cards do. A debit card allows transfer of money electronically from one bank account to another. It also allows withdrawal of money from ATM's or bank machines with ease and makes available the option to pay at stores. Some Debit cards are now also contactless, which means that PIN number is not to be entered if the purchase is under a set amount. There are two types of debit