Credit card payment

Credit card payment
Credit card payment is one of the most popular payment methods worldwide and is also becoming increasingly popular in Germany, even though Germans often talk and write about an unfounded aversion to credit cards. However, this applies primarily to purchases in stationary retail. In online retail, things are different here, and at the latest when we talk about subscription models, it is obligatory to offer credit card payment in the portfolio of the online company. Why, and what advantages and disadvantages credit cards have for customers and companies, we want to discuss in more detail in this article.

Worldwide, four major credit card organizations divide up the market for credit card payments. Mastercard, Visa, American Express and Diners are the four main credit cards.

Credit card payment | Visa | Mastercard | American Express | billwerk Wiki

In Germany, Mastercard and Visa are particularly relevant, as they are issued by all credit institutions and savings banks. Although the EC or giro card is still the most widely used payment card, 36 percent of Germans still own a classic credit card. Acceptance in the retail sector is now huge – both stationary and digital, and new encryption methods are intended to create further trust in Germany as well. In addition, new technologies such as contactless payment are making things more convenient.

 

What are the advantages of credit card payment?

For the costumer:

  • Instant convenient payment
  • Recurring payments easily adjustable, depending on the provider often by one click or by default setting (of course with corresponding objection option)
  • Credit card payments are not immediately debited from the reference account
  • Depending on the credit card, the cardholder might receive bonus points (e.g. Miles & More)

For the company:

  • Fast and secure payment processing
  • The cost of processing payments is much lower today than it was just a few years ago (fees are capped at 0.3 percent of the payment amount). Corporate credit cards and American Express cards are exceptions.
  • Higher security and faster order processing, because once a payment is authorized within seconds, the probability of non-payment is extremely low.
  • Further increase in consumer acceptance. In addition, payment services such as PayPal also offer their customers payment by credit card.

 

As with any payment method, there are also disadvantages with credit card payments. For example, customers must entrust all credit card data to the provider, which in times of data leaks is a reason for many potential buyers to choose a different payment option. There are also fees for both the customer and the merchant. As mentioned earlier, the merchant even has to pay a fee per transaction. However, the fact that fees are tending to fall and consumer acceptance is increasing means that credit card payments should definitely be considered as part of the payment portfolio.

 

What does credit card payment mean for the Subscription Economy?

Especially in the subscription economy, start-ups and smaller companies, payment by credit card is becoming increasingly important. Increasing online purchases in recent years have led to ever greater acceptance of credit cards. As a result, this convenient payment method is also very popular for subscription models. It is true that new data protection regulations under DSGVO (German: Datenschutzgrundverordnung) are creating more bureaucracy, especially with regard to the storage of credit card data, but of course also more security (PCI DSS compliance requirements). But Payment Service Providers (PSP) such as Payone, PayPal, Opayo (formerly Sage Pay) or GoCardless take care of the proper processing of credit card payments, so that the company can dispense with tying up resources in this case and instead concentrate on its core business.

 

Conclusion: A must for online commerce

One thing is certain: the more payment methods an online company offers its customers, the more sales this means for the company itself. Above all, however, offering Mastercard, Visa & Co. in online commerce is a confidence-building measure. These are well-known and popular brands that enjoy a high reputation and trust, especially among the subscription and online-savvy target group. Moreover, in times of numerous certified PSPs, the company no longer has to worry about payment processing itself, but instead makes every effort to advance its own business.

Find out more about billwerk & scale your growth now
Automate your subscription business model with billwerk Subscription Management & Recurring Billing.

in Wiki: Billing & PaymentWiki: Payment method