Different Credit Card Transaction Types Explained
Sometimes, getting into someone else’s shoes provides a clearer perspective. This especially applies in business, where looking at things through the customers’ eyes can be vastly different from the business’s point of view. Credit card transactions are a good demonstration of this principle. Consumer’s simply swipe or type and don’t necessarily give much thought to the other side.
But when you’re wearing your ‘business hat’, every transaction has its own unique aspects. That said, the basic principles are the same. When the customer makes their payment, your payment processor verifies the transaction instantly, and subsequently transfers the money to your account. Let’s look at the various ways cash can leave your customer’s bank account and end up in yours.
Electronic keypad payments
This is the most familiar option, as seen in grocery stores and retail outlets. The customer lines up at the cash register, where a cashier will tally their purchases. The customer then swipes their card through a keypad terminal, facilitating instant payment.
Smartphone payments
Smartphone apps come in various versions. They may also include a removable dongle device with a credit card slot that attaches to a phone through the headphone jack or data port. Your customers can slip their cards into the slot and make a payment, just like they do on portable keypads. You can then issue them a digital receipt.
Online payments
For customers that are buying online, they load their items into their virtual shopping cart. Then, they can click ‘proceed to check-out’ where they can type their credit card details onto your payment portal.
More on Types of Credit Cards
Generally, there are six different types of credit cards. While they all do essentially the same thing, each type of card may be handled differently by your point-of-service terminal or your credit card processor, so it can be valuable to know the difference so you know what to expect.
The different types of credit cards are: standard unsecured credit cards, secured credit cards, credit cards for students, small business credit cards, store credit cards and charge cards. Beyond the larger classifications, there are also many more categories segmented out by things like cash back credit cards, travel credit cards and 0% credit cards, which are intended to entice users that have certain financial needs.
Digging deeper, there are thousands of different credit cards available out there, but they all fall into one of the main types, which are themselves designed for certain group profiles.
The type of credit card user is one consideration. General consumers, small business owners and students all have different needs, and each has a different type of credit card that is designed for them. There are also different underwriting qualifications such as a user’s credit history, their income and assets, and their debts and liabilities.
Types of Credit Cards by Feature
On the terms and features side, which govern things like transaction fees, reward structure, special features and the all-important APR, you’ll find more specialized cards that make up the six main types of credit cards.
There are secured cards, which requires a security deposit and is best for people with bad, low or no credit. They’re similar to standard unsecured credit cards in features and function outside of the deposit and funding the available balance instead of drawing on credit, but otherwise they work just like typical credit cards.
Other types of credit cards include co-branded and affinity cards that are linked to specific brands and companies but that operate just like a regular credit card, as well as merchant affiliated cards that only work at the issuing retailer or charge cards that must be paid in full each month.
For more information on different types of credit card transactions, or to sign up for a merchant account, please call (888) 924-2743 or visit Charge.com.