Debit Card Use Increases for In-Store and Online Payment Processing

It’s a startling truth that businesses need to be accepting credit cards in order to achieve success. With so many businesses moving or expanding their stores onto the net, online payment processing methods need to be established. More and more people are using their credit cards to make purchases, with debit cards achieving more popularity perhaps because of PIN protection.

Debit card transactions are up 16 percent from last year, according to Natural News. While many encourage people to use their debit cards as a “credit” option to save money, consumers are still using their PINs when making a purchase. Some retailers have encouraged their customers to shy away from this option by charging an extra few cents to use their debit card, but until recently under the protection of the Durbin Amendment, contracts with Visa and MasterCard explicitly ordered them not to.

Credit card processing online is almost an exclusive practice, since there is hardly any other way to receive payment for transactions.

Most people don’t feel safe walking around with a checkbook or cash. Such items can easily be lost or stolen, wrecking devastating financial havoc on the account holder. Cards can be easily tracked, and although it is not required by law for businesses to check ID with a credit card, doing so helps discourage credit card fraud. MasterCard and Visa charge a swiping fee to merchants, which most business owners find a hassle.

Swiping fees were originally designed to prevent fraud and cover overhead costs. But business owners are now complaining that these fees are now used to make a profit off of their business. And because of the duopoly that Visa and MasterCard have made for themselves, they can hardly fight against it.

A recent regulation called the Durbin Amendment to the Dodd-Franklin Act has attempted to put a cap on swiping fees and increase competition in the credit card industry. However, most banks are critical of the policy movement, and feel that putting a cap on swiping fees reduces their ability to provide free checking account services and rewards programs.

While these programs were free at one point in time, we are seeing a trend of charges for simply holding an account. This kind of backlash hasn’t set well with consumers either, as prices at big box retailers aren’t dropping as intended. One thing is for sure, debit and credit cards are here to stay. With an increase in their use online and in stores, some really wonder if policy making can really make much of a difference at all.
Guest post is provided by Payment Solutions, Inc., processing credit cards online for small businesses with no contract necessary. Visit their website for more information.

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