Your clients can conveniently pay for their products and services, and you can easily collect contactless payments through platforms. And the icing on the cake, you can collect the payments through cards, smartphones, and even wearables such as smart watches.
But, how do payments on credit cards work?
Put simply, the credit card allows your customers to borrow and spend money they don’t yet have, with the credit card provider trusting that they will pay back the owed amount within a set period.
What should you know about a Credit Card?
When customers apply for a credit card, the credit card provider performs a hard credit check. This process involves checking and evaluating the customer’s files where having a good credit rating elevates their chances of having a successful credit application.
Hard checks also allow the customers to access cards that offer lower interest rates, among other promotional offers.
Some credit companies aren’t too strict and perform a soft check instead. This type of credit inquiry does not impact the customer’s credit ratings. Also, it doesn’t dig deeper into the customer’s credit history so the card insurer doesn’t have a clear picture of the customer’s financial standing.
There are many types of credit cards that your customers might be having. The common ones being:
0% purchase cards: These cards don’t charge interest for a set period. This means that the users can buy products using the card and not pay any excess amount. The cards are preferred by people that want to purchase large items or shop online regularly.
0 balance transfer cards: These allow users to transfer debt from a high-interest account to a lower interest account for free.
Credit builder cards: These are popular with applicants new to borrowing or those with a low credit score. These cards often have lower credit limits and high-interest rates.
How do you properly collect credit card payments?
Remember that when you collect payments from your customers, you are handling their money and data, and you don’t want to do this unprofessionally, do you? To do it proficiently, you need to:
Be PCI compliant.
This simply means that you meet the requirements set forth by the Payment Card Industry (PCI). PCI’s goal is to protect customers from payment fraud, so for your customers to feel safe, be PCI compliant.
Secure the payment acceptance integration
A Thales Data Threat Report showed that 67% of credit card users had experienced a data breach, while 44% of the users have strong feelings that their credit card data was at the risk of being breached.
To add a layer of protection for your customers, consider adding a secured payment gateway to your online and offline stores.
Tokenize your business
This is basically replacing sensitive data with special symbols that are hard to decipher. This way, in the event your system gets hacked, it’s the token that is visible to the hacker while the sensitive, confidential data is safely stored in a token vault.