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Trends: Online credit cards

by David Blakey

Your clients may need to review which cards they accept online.

[Monday 24 January 2011]


The shopping carts on your clients' websites should encourage payment by a range of credit and store cards.

Traditional credit cards

Most online vendors will use a third-party credit card handler that will deal with payments by Visa and MasterCard. These are the two major traditional international credit cards. They are credit cards, rather than charge cards, and they are held by people at a number of socio-economic levels. It is relatively easy for an individual or an organization to obtain a credit card.

Charge cards

The two major charge cards are American Express and Diners Club. In the past, both issuers only issued charge cards, which the holder would have to pay off completely each month. Both required minimum income levels for a holder to be issued with a card. Many online credit card handlers have taken AmEx cards and a few have taken Diners Club.

Both issuers have moved to issuing credit cards in additional to their charge cards. While both issuers continue to issue cards to people who have a higher income than is needed for a Visa or MasterCard, this marks a move towards greater equality between the four major cards.

In my view, you should recommend to your clients that they ensure that their websites can accept all four of these cards.

Other bank cards

There are some other cards around, issued by individual banks. These include the JCB card, issued by a subsidiary of the Japan Credit Bureau. JCB cards became available in the USA in 1993 and in New Zealand in 1999. Your clients should consider whether accepting cards such as JCB will increase their business.

Other cards

There are other cards that clients could consider accepting on their websites. These include cards issued by individual stores and cards issued by finance companies. This decision rests mainly on the level of customer that they wish to attract. Many of the cards issued by finance companies are aimed at low-income customers who have not got credit or charge cards.

Summary

Your clients may decide that they are happy with their current situation. It is still worthwhile for them to review the cards that they accept, especially when the nature of those cards may have an effect of the market perception of your clients.




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The opinions expressed are solely those of the author.

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