Credit Card
More than one billion people worldwide use the benefits of a credit card. They pay at over 33 million points of acceptance and do their shopping without cash. In Europe, 16 percent of all payments are now settled by credit card. As the name suggests, the customer first receives credit from his banking partner. The account is only debited with the amount paid after a delay. For this reason, sufficient creditworthiness is first checked before a credit card is issued.
The most important providers
A credit card is issued either by a bank, as in the case of Mastercard or Visa, or directly by a card company (American Express, Diners Club). These four companies operate worldwide and basically cover the entire European market. In addition, there are regional providers that are only represented in individual countries. The first providers in Germany were initially Diners Club (on the German market since 1954) and American Express (since 1958). However, their credit cards have since been superseded in importance as a means of payment by the current market leader Mastercard (since 1975) and Visa (since 1980).
Distribution and user structure
An estimated 20 percent of all Germans own a credit card. In total, more than 25 million cards are in circulation in this country, with many credit card owners carrying more than one card in their wallets. These customers also become interesting for e-commerce operators because of their profile: In general, they are people with higher education and corresponding income – and they like to shop on the Internet. In other industrialized countries, the use of credit cards for Internet purchases is even more widespread than in Germany. So operators of online stores can no longer do without this payment option on their site, all the more so if they also want to sell abroad.
Fees
The merchant bears the costs for transactions with a credit card. The credit card companies charge a discount for each order, which is usually between three and five percent depending on the industry and sales volume. In individual cases, however, as little as one percent or as much as ten percent may be charged. There are also fixed monthly costs. For the customer, purchases with a credit card are free of charge within Germany and within the eurozone. Outside the eurozone, however, additional fees may apply. Banks generally charge a fixed annual fee for issuing the card.
Safety first – even with credit cards
Credit card companies devote a lot of energy and investment to making credit cards even more secure against misuse. Among other things, many customers appreciate the high security standards in the event of loss or theft: the customer is liable for damages incurred before the card is blocked, up to a maximum of 50 euros. When payments are made on the Internet, the data is transmitted in encrypted form between the buyer and the merchant and the two banks involved; this can be recognized by the https:// in front of the Web address and a small lock in the footer. Major credit card organizations control their systems around the clock. Visa Europe assumes that less than six cents per 100 euros are lost to fraud. In addition, the aggrieved customer can arrange a transfer of the sum back, a so-called chargeback, via his banking institution. With the help of so-called 3D Secure procedures, Mastercard (Mastercard SecureCode) and Visa (verified by Visa) also rely on additional procedures especially for online commerce.
