This is a question asked by many consumers on a daily basis – for consumers whether handling an online or even an offline transaction. The real difference between what is known as a debit card and a the more popular credit card is that the debit card uses funds held in a checking or savings account at some financial institution while the credit card uses funds that are held by the financial institution but ‘loaned’ to the credit card holder (hence the term credit). As the consumer does not have the actual cash in hand to make a purchase but has been given a line of credit (or allotted a specific amount of cash he/she can borrow) up to what is called the limit. So the limit on a credit card is just how much the holder can spend and the limit on a debut card is how much the holder has in his/her bank account.
At the point when a Card Processor Merchant inquires how your transaction would be processed either credit or debit it actually means that they are attempting decide how they will process the transaction, either using a merchant account that accepts Visa, Master Card, Discover or even American Express or an they will use an inter bank network that uses PLUS, Cirrus or Maestro for authentication. Many people become easily confused and don’t realize the implications of using one over the other.
Retail Store Card Processing has led to a clear review of how people use debit vs. credit cards. There are really three types of cards that are used today by consumers globally:
- Traditional credit card – based on a banking line of credit
- Traditional debit card – based on existing monies held by the financial institution for the card holder
- Prepaid Credit Cards – These cards operate like a traditional credit card in processing but draw from a checking or saving account.
Most consumers still prefer the traditional credit card but cannot cope with the hefty fees and interest charges that are levied against then based on the card APR. However there is the more fundamental issue outside of processing which is fraudulent transactions and identity theft. These are dealt with in different ways depending on the jurisdiction. Some credit card companies promptly return the funds to a card holder on query, while others have to investigate the matter before issuing what is known as a charge back. In the case of a debit card, this is usually refunded to the persons account immediately until the matter is investigated, however in some jurisdictions, the mater is looked on based on the transaction and then funds are returned to the consumer.
If you own a business, whether brick and mortar or internet business the best Merchant Processor we can find that will allow you to accept credit cards are MS Merchant Account. They seem to have a solid track record and offer a wide range of services from local to offshore merchant processing services. Here are some credit card videos that you can browse through.: