The people of the world use pieces of plastic to pay for items more frequently than they use cash or paper checks. Paper checks will give them the same access to their banking accounts, but paper checks are a hassle to carry around. Not to mention, when you write a check you have to drag out your identification, and there are some merchants who simply stopped accepted these items as a source of payment. So the credit cards and the debit cards are being used the majority of the time when people make a purchase. This means that card payment processing is occurring more frequently than ever before.
Card payment processing is generally done through a company that specializes in the equipment necessary to do these types of transactions. This company will provide to the merchant machines that allow the card holder to use their plastic money variations. The card holder will place their piece of plastic into the machine and the machine will read the encrypted information contained on the piece of plastic. The card holder will likely have to enter a pin number in order for the transaction to be completed.
Although it appears that card payment processing is instantaneous, the truth is that the merchants will have to wait a period of time before they receive their money for the goods they sold. The company that provided them with the machine that could read the plastic will charge the merchants for using this equipment. The charges are generally around one or two percent of the total amount of the sale. The company processes the payment and the bank or financial institution that issued the card will send the payment for the transaction. The payments from these financial institutions may be made immediately and they may be made up to thirty days in the future.
The charges that the merchant have assessed against them during card payment processing transactions is why some stores will only allow you to use these items if you purchase a minimum amount of items. At most locations the minimum purchase amount to use a debit or credit account is five dollars. Making certain that the customer spends a minimum of five dollars covers the amount of money the merchant is charged for the transaction and makes sure that they are not losing money on the deal.
Almost every store now has the equipment to process transactions such as these. The real growth in these types of transactions has happened due to the fact that people can now have their smart phones equipped so that they accept this form of payment. People who used to sell items door to door had to start to accept the newer methods of payment because fewer of their customers kept cash or checks on hand. Using your smart phone to accept payment for goods or services is a growing trend.
Keeping your information safe is the biggest concern for people engaging in these transactions. Check your statements carefully each month and report any unusual charges you see.