Credit Card Payment Processing | Digital Payments Benefiting Customers and Businesses

Credit Card Payment Processing | Digital Payments Benefiting Customers and Businesses

Posted On: April 20, 2023 Posted By: Prerna Saxena

Introduction

Across the world, the most common sight at the billing counters: Take the wallet out of your pocket, pick the card and pass it on to make the credit card payments and begin Digital payment processing.

In India, some of the most commonly heard expressions during these transactions are: “Can I tap it?” “What is the PIN?”

For decades now, paying through credit cards has become one of the most common practices and a more convenient one too.

It actually surpassed cash payments, since alarmingly low or even ‘zero balance’ in the customer’s account doesn’t affect the payment.

Customers can still make a payment by just swiping credit card. This is owing to the inherent benefits of the credit card payment that don’t have to deal with the immediate availability of funds in the customer’s account.

Why use a Credit card - Pay later

As the word suggests, credit card payment is all about extending of credit to customers where they make the payment at a later date to the credit card company, while the company makes the payment to the merchant instantly.

Isn’t this exciting and interesting? No wonder, credit card transactions have become the most sought-after tradition, anywhere on the globe.

While technically gaining credit is the ultimate advantage that a customer draws from credit card transactions, the benefits to the merchant and the businesses are more than what one can primarily imagine.

By accepting credit card payment, merchants are actually maximizing their opportunities, winning more business, and are attracting impulse and unplanned purchases.

This is because the buyer doesn’t need to pay out of his pocket at the time of purchase.

A) Glance at the customer side:

What are the typical advantages for customers that can spur them to go for credit card purchases?

The monthly billing cycle gives them a cushion of more than 50 days for the clearance of the payment,
Flexibility to convert payments into monthly EMIs
Exemption from making full-bill payment and the provision to make minimum payment

Irrespective of certain long-term disadvantages that can be seen in the aforementioned aspects, the credit card payment.

when done in a responsible and pragmatic manner give unmatched convenience to the customer, thereby motivating them to use the card more often and for bigger purchases.

B) Why your business should accept credit card payment

Now, from a business point of view: Why your business should accept credit cards and allow more credit card purchases?

1. Credit Card Payment trigger impulse and unplanned buying:

Imagine people having no cash, or have just enough cash for purchases that are necessary at the given moment, or most important or indeed indispensable. In these cases, customers restrict their shopping to a minimum.

This naturally stunts the business potential at the point of purchase. Now, imagine a situation where there is a credit card in the customer’s pocket and now it hardly matters whether they have cash in their wallet or their bank account.

Doesn’t this automatically pave way for sudden purchases? All you need to offer is credit card swiping.

2. Credit Card Payment Processing facilitate remote and online purchases

Haven’t credit cards made it easier to make purchases online? The flexibility of credit card transactions has ensured the customer doesn’t need to travel and close the payment.

It also reduced the need for cash, or sufficient bank balance at the time of purchase. So, buy a refrigerator or even book a car with credit card swiping.

3. Less cash is less complications by using Credit cards

From a merchant’s point of view, accepting and storing cash as less as possible minimizes risks and operational hassles, and saves the time needed to deposit it.

It enhances the safety element and the digital recording is made much easier, thereby avoiding accounting gaps and reconciliation issues.

4. Credit Cards ensure customer loyalty and repeated sales

Acceptance of credit card payments strengthen the bond with the customer, bringing them back more regularly, and also the advantage of the word of mouth.

5. No geographical borders and barriers

They are no geographical borders and barriers for credit card payments

One can use credit cards anywhere in the world, subject to card’s eligibility criteria

Credit cards transactions growing in India, phenomenally

Can you believe this? In the last quarter of FY 2022, the number of credit card and debit card transactions in India stood at 1 billion.

It has been concluded that post pandemic, the credit card transactions have spiked to a new high in the country, from Rs 6,30,414 crore in financial year 2020–21, to Rs 10,49,065 crore in the first nine months of FY23, as per a report quoting RBI information.

Between Dec 2019 and Dec 2022, this increase was a whopping 92 percent.

Credit card payment, along with the UPI payments are undoubtedly redesigning the merchandising landscape of the country, encouraging cashless transactions and making payments easier and more convenient.

On the business front, accepting credit card and digital payments only enhances their opportunities and brings in more business through ease and with a better speed.