Product Code Database
Payment cards are part of a payment system issued by financial institutions, such as a bank, to a customer that enables its owner (the cardholder) to access the funds in the customer's designated , or through a credit account and make payments by electronic transfer with a payment terminal and access automated teller machines (ATMs). Such cards are known by a variety of names, including bank cards, ATM cards, client cards, key cards or cash cards.
There are a number of types of payment cards, the most common being credit cards, debit cards, , and prepaid cards. Most commonly, a payment card is electronically linked to an account or accounts belonging to the cardholder. These accounts may be deposit accounts or loan or credit accounts, and the card is a means of authenticating the cardholder. However, stored-value cards store money on the card itself and are not necessarily linked to an account at a financial institution. The largest global card payment organizations are: UnionPay, Visa, Mastercard and American Express.
It can also be a smart card that contains a unique card number and some security information such as an expiration date or with a magnetic strip on the back enabling various machines to read and access information. Depending on the issuing bank and the preferences of the client, this may allow the card to be used as an ATM card, enabling transactions at automatic teller machines; or as a debit card, linked to the client'
. Retrieved October 24, 2022.
The first bank cards were automated teller machine (ATM) cards issued by Barclays in London in 1967,Jarunee Wonglimpiyara, Strategies of Competition in the Bank Card Business (2005), p. 1-3. and by Chemical Bank in Long Island, New York, in 1969. In 1972, Lloyds Bank issued the first bank card to feature an information-encoding magnetic strip, using a personal identification number (PIN) for security.
The smart card, which was introduced in the 1970s, was adapted for use as a payment card. Smart payment cards were introduced to the banking sector in 1979, and came into wider use in the mid-1980s.
Canada's Interac and Europe's Debit Mastercard are examples of networks that link bank accounts with point-of-sale equipment.
Some debit card networks also started their lives as ATM card networks before evolving into full-fledged debit card networks, example of these networks are: Development Bank of Singapore (DBS)'s Network for Electronic Transfers (NETS) and Bank Central Asia (BCA)'s Debit BCA, both of them were later on adopted by other banks (with Prima Debit being the Prima interbank network version of Debit BCA).
They usually also have a unique card number conforming with the ISO/IEC 7812 numbering standard, the cardholder’s name and the card expiry date, in addition to other security features. Historically this text was embossed to produce an imprint on multi-part paper forms, and some cards are still produced this way.
The cardholder can either repay the full outstanding balance or a lesser amount by the payment due date. The amount paid cannot be less than the ”minimum payment,” either a fixed amount or a percentage of the outstanding balance. Interest is charged on the portion of the balance not paid off by the due date. The rate of interest and method of calculating the charge vary between credit cards, even for different types of cards issued by the same company. Many credit cards can also be used to take cash advances through ATMs, which also attract interest charges, usually calculated from the date of cash withdrawal. Some merchants charge a fee for purchases by credit card, as they will be charged a fee by the card issuer.
In other countries such as France, the distinction between debit and credit cards is based on when the customer's account is debited for the transaction. A debit card debits the customer's account as the transaction is made, while a credit card debits it at the end of the month automatically.
What is called a credit card in the United States - meaning the customer has a bill to pay at the end of the month - does not exist in the French banking system. However, credit companies can provide these cards, but they are separate from the regular banking system. In this case, the consumer decides the maximum amount, making it impossible to fall into debt by forgetting to pay a credit card bill.
Credit scores or credit history do not exist in France, and therefore the need to build a credit history does not exist. Personal information cannot be shared among banks, which means there is no centralized system for tracking creditworthiness. The only centralized system in France is for individuals who file for bankruptcy or those who have not repaid credit or issued checks without sufficient funds. This system is handled by the Banque de France.
The use of debit cards has become widespread in many countries and has overtaken use of cheques, and in some instances cash transactions, by volume. Like credit cards, debit cards are used widely for telephone and internet purchases.
Debit cards can also allow instant withdrawal of cash, acting as the ATM card, and as a cheque guarantee card. Merchants can also offer "cashback"/"cashout" facilities to customers, where a customer can withdraw cash along with their purchase. Merchants usually do not charge a fee for purchases by debit card.
The use of a credit card to withdraw cash at an ATM is treated differently to an POS transaction, usually attracting interest charges from the date of the cash withdrawal. The use of a debit card usually does not attract interest. Third party ATM owners may charge a fee for the use of their ATM.
Most payment cards, such as debit and credit cards, can also function as ATM cards, although ATM-only cards are also available. Most charge and proprietary cards cannot be used as ATM cards. The use of a credit card to withdraw cash at an ATM is treated differently to a POS transaction, usually attracting interest charges from the date of the cash withdrawal. Interbank networks allow the use of ATM cards at ATMs of private operators and financial institutions other than those of the institution that issued the cards.
All ATM machines, at a minimum, will permit cash withdrawals of customers of the machine's owner (if a bank-operated machine) and for cards that are affiliated with any ATM network the machine is also affiliated. They will report the amount of the withdrawal and any fees charged by the machine on the receipt. Most banks and credit unions will permit routine account-related banking transactions at the bank's own ATM, including deposits, checking the balance of an account, and transferring money between accounts. Some may provide additional services, such as selling postage stamps.
For other types of transactions through telephone or online banking, this may be performed with an ATM card without in-person authentication. This includes account balance inquiries, electronic bill payments, or in some cases, online purchases (see Interac Online).
ATM cards can also be used on improvised ATMs such as "mini ATMs", merchants' card terminals that deliver ATM features without any cash drawer. These terminals can also be used as cashless scrip ATMs by cashing the receipts they issue at the merchant's point of sale.. In 2017, there were 20.48 billion payment cards in circulation worldwidehttp://www.nilsonreport.com/upload/issues/1140_0321.pdf . In 2018, the payment card fraud losses in the world were US$27.85 billion, and US$9.47 billion in the U.S.
The term stored-value card means that the funds and or data are physically stored on the card. With prepaid cards the data is maintained on computers controlled by the card issuer. The value stored on the card can be accessed using a magnetism stripe embedded in the card, on which the card number is encoded; using radio-frequency identification (RFID); or by entering a code number, printed on the card, into a telephone or other numeric keypad.
Fleet cards provide convenient and comprehensive reporting, enabling fleet owners/managers to receive real time reports and set purchase controls with their cards, helping to keep them informed of all business related expenses. They may also reduce administrative work or otherwise be essential in arranging fuel taxation refunds.
EMV is the standard adopted by all major issuers of smart payment cards.
Modern proximity cards are covered by the ISO/IEC 14443 (proximity card) standard. There is also a related ISO/IEC 15693 (vicinity card) standard. Proximity cards are powered by resonant energy transfer and have a range of 0–3 inches in most instances. The user will usually be able to leave the card inside a wallet or purse. The price of the cards is also low, usually US$2–$5, allowing them to be used in applications such as identification cards, , payment cards and public transit fare cards.
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