Since the 1960s, the credit card has gone from being a financial novelty to an essential part of everyday business. The phenomenal growth in the use of credit and debit cards has played a large role in moving towards a cashless society.
Millions of individuals today use cash only as the exception. They have their paychecks and other income directly deposited into their bank account, never handling a paper check in the process. Digital money pays everything from the utility bills to a night on the town.
There is now a general expectation to be able to use a credit or debit card anywhere and everywhere. To respond to this expectation, virtually every business accepts credit and debit cards for purchases. As business online has rapidly grown, online merchants take payments over the Internet.
The Business of Processing Credit and Debit Cards
The first general consumer credit card was issued by Bank of America in the 1960s. The business has become highly specialized since that time. Billions of dollars from millions of transactions are processed daily.
The Visa and MasterCard networks dominate the credit and debit card business. The industry is made of companies that specialize in different aspects of these and smaller networks. The pieces all work together to bring a tremendously valuable service to the customer and merchant at an affordable price.
Internet Merchant Account Features
One significant reason small companies and individuals can compete and thrive on the Internet is the availability of Internet merchant account services. This capability allows a website to facilitate payments for products and services. These merchant accounts provide:
• Fraud prevention. An address verification service verifies that the billing address customers enter on the website matches the card being used.
• Integrated merchant services. Payments can be taken by phone, fax, smart phones or land lines in addition to the Internet. Payments are accepted with physical or virtual terminals.
• Full online management of accounts. All deposits and payments are managed online.
• Recurring Billing. Provides the ability to generate monthly automated billing.
The business of the Internet is powered by the use of online merchant services.