Payment card

Example of two credit cards

An example of the front of a typical debit card:

1. Issuing bank logo
2. EMV chip
3. Hologram
4. Card number
5. Card brand logo
6. Expiration date
7. Cardholder's name

A payment card is a device that enables its owner (the cardholder) to make a payment by electronic funds transfer. The most common types of payment cards are credit cards and debit cards. Payment cards are usually embossed plastic cards, 85.60 × 53.98 mm in size, which comply with the ISO/IEC 7810 ID-1 standard. They usually also have an embossed card number conforming with the ISO/IEC 7812 numbering standard.

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 are cards that store a monetary value on the card itself.

Types

Payment cards can be distinguished on the basis of the features of each type of card, including:

Credit card

Main article: Credit card

A feature of a credit card is that the issuer of the card creates a line of credit (usually called a credit limit) for the cardholder on which the cardholder can draw (i.e., borrow) for payment to a merchant in making a purchase or as a cash advance to the cardholder. Most credit cards are issued by or through local banks or credit unions, but some non-bank financial institutions also offer cards directly to the public.

Credit cards allow the cardholder to either pay the full balance of the statement amount by the payment due date or pay the "minimum amount" by that date. In the former case, interest is typically not charged; while in the latter case, the cardholder will be charged |interest. The rate of interest and method of calculating the charge vary between credit cards, even for various cards issued by the same company. Many credit cards can be used to make cash advances through ATMs, which also attract interest charges, usually calculated from the date of cash withdrawal. Some merchants charge a fee for purchases using a credit card.

Debit card

Main article: Debit card

File:I'm loving it -- debit card at the Guantanamo McDonalds.jpg

Purchasing by debit card

A feature of a debit card (also known as a bank card, check card or some other description) is that when a cardholder makes a purchase funds are withdrawn directly from either the cardholder's bank account, or from the remaining balance on the card. In some cases, the "cards" are designed exclusively for use on the Internet, and so there is no physical card.

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, and unlike credit cards the funds are transferred from the bearer's bank account instead of having the bearer to pay back on a later date.

Debit cards can also allow for 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 using a debit card.

Charge card

Main article: Charge card

A feature of charge cards is that the cardholder is required to pay the full balance of the statement amount, which is usually monthly, by the payment due date. It is a form of a very short-term loan to cover the cardholder's purchases. The period of the loan is the period between the purchase and the statement date plus the period that the cardholder has to pay the account, a potential period of usually up to 55 days. Interest is usually not charged on charge cards and there is usually no limit on the total amount that may be charged. A partial payment (or no payment) may result in a late payment fee, the possible restriction of future transactions and a potential cancellation of the card.

ATM card

Main article: ATM card

An ATM card (known under a number of names) is any card that can be used in automated teller machines (ATMs) for transactions such as deposits, cash withdrawals, obtaining account information, and other types of transactions, often through interbank networks. Cards may be issued solely to access ATMs, and most debit or credit cards may also be used at ATMs, but charge and proprietary cards cannot.

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 the ATM.

Stored-value card

Main article: Stored-value card

A feature of a stored-value card is that a monetary value is stored on the card, and not in an externally recorded account and differs from prepaid cards where money is on deposit with the issuer similar to a debit card. One major difference between stored value cards and prepaid debit cards is that prepaid debit cards are usually issued in the name of individual account holders, while stored-value cards are usually anonymous.

The term stored-value card means the funds and or data are physically (materially, with mass) stored on the card. With prepaid cards the data is maintained on computers affiliated with the card issuer. The value associated with the card can be accessed using a magnetic 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 card

Main article: Fleet card

A fleet card is used as a payment card most commonly for gasoline, diesel and other fuels at gas stations. Fleet cards can also be used to pay for vehicle maintenance and expenses at the discretion of the fleet owner or manager. The use of a fleet card also eliminates the need for cash carrying, thus increasing the level of security felt by fleet drivers. The elimination of cash also makes it easier to prevent fraudulent transactions from occurring at a fleet owner or manager’s expense.

Fleet cards are unique due to the convenient and comprehensive reporting that accompanies their use. Fleet cards enable fleet owners/managers to receive real time reports and set purchase controls with their cards helping them to stay informed of all business related expenses.

Other

Other types of payment cards include:

• Gift card
• Electronic money

Technologies

A number of International Organization for Standardization standards, ISO/IEC 7810, ISO/IEC 7811, ISO/IEC 7812, ISO/IEC 7813, ISO 8583, and ISO/IEC 4909, define the physical properties of payment cards, including size, flexibility, location of the magstripe, magnetic characteristics, and data formats. They also provide the standards for financial cards, including the allocation of card number ranges to different card issuing institutions.

Embossing

Originally charge account identification was paper-based. In 1959 American Express was the first charge card operator to issue embossed plastic cards which enabled cards to be manually imprinted for processing, making processing faster and reduced transcription errors. Though the imprinting method has been predominantly superseded, cards continue to be embossed in case a transaction needs to be processed manually. Cards conform to ISO/IEC 7810 ID-1 standard, ISO/IEC 7811 on embossing, and have a bank card number complying with the ISO/IEC 7812 numbering standard.

Magnetic stripe card

Main article: Magnetic stripe card

An example of the reverse side of a typical debit card:

1. Magnetic stripe
2. Signature strip
3. Card Security Code

Magnetic stripes started to be rolled out on debit cards in the 1970s with the introduction of ATMs. The magnetic stripe stores card data which can be read by physical contact and swiping past a reading head.

Smart card

Main article: Smart card

Smart card used for health insurance in France

A smart card, chip card, or integrated circuit card (ICC), is any pocket-sized card with embedded integrated circuits which can process data. This implies that it can receive input which is processed — by way of the ICC applications — and delivered as an output. There are two broad categories of ICCs. Memory cards contain only non-volatile memory storage components, and perhaps some specific security logic. Microprocessor cards contain volatile memory and microprocessor components. The card is made of plastic, generally PVC, but sometimes ABS. The card may embed a hologram to avoid counterfeiting. Using smart cards is also a form of strong security authentication for single sign-on within large companies and organizations.

EMV is the standard adopted by all major issuers of smart payment cards.

Proximity card

Main article: Proximity card

A proximity card

Proximity card (or prox card) is a generic name for contactless integrated circuit devices used for security access or payment systems. It can refer to the older 125 kHz devices or the newer 13.56 MHz contactless RFID cards, most commonly known as contactless smartcards.

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, keycards, payment cards and public transit fare cards.

Re-programmable magnetic stripe card

Re-programmable/dynamic magnetic stripe cards are standard sized transaction cards that include a battery, a processor, and a means (inductive coupling or otherwise)of sending a variable signal to a magnetic stripe reader. Re-programmable stripe cards are often more secure than standard magnetic stripe cards and can transmit information for multiple cardholder accounts.

See also

• Credit card fraud
• Payments as a platform
• Payment card industry
• Payment gateway
• Payment system
• Payment Services Directive
• Payment terminal
• Prepayment for service