FITS TO MERCHANTS

An illustration of street markets accept credit cards

For merchants, a credit card transaction is frequently added more security than other types of payment, such as checks, because the issuing bank commits to pay the merchant the instant the transaction is official, in spite of whether the consumer defaults on the credit card payment (apart from for legitimate disputes, which are discussed below, and can result in charges back to the merchant). In the majority cases, cards are even more protected than cash, because they discourage theft by the merchant's employees and decrease the amount of cash on the place. Prior to credit cards, each merchant had to estimate each customer's credit narration before extending credit. That duty is now performed by the banks which suppose the credit risk.

For every purchase, the bank charges the merchant a expenses (discount fee) for this service and there may be a assured delay before the decided payment is get by the merchant. The charge is regularly a percentage of the transaction amount, plus a fixed fee. additionally, a merchant may be penalized or have their capacity to receive payment by means of that credit card limited if there are too many cancellations or reversals of charges as a result of disputes. various small merchants want credit purchases to have a smallest amount (usually between $5 and $10) to recompense for the transaction costs, although this is not forever permissible by the credit card consortium.

In a number of countries, for illustration the Nordic countries, banks assurance payment on stolen cards just if an ID card is checked and the ID card number/civic registration number is written down on the receipt jointly with the mark. In these countries merchants consequently more often than not ask for ID. Non-Nordic citizens, who are doubtful to possess a Nordic ID card or driving license, will as an alternative have to show their passport, and the passport number will be written down on the delivery, occasionally jointly with other information. a number of shops use the card's PIN for identification, and in that case showing an ID card is not essential.