|Paying Without Credit Card|
How are the possibilities?
|troels nybo nielsen|
I have not really dug into this, but I have got the impression that very many websites that are paid for (some of) their services can only be paid with credit cards. And if indeed a website has an alternative way of paying this may only be possible for people from the same country as that website.
I am aware that this may only be a problem for a very limited minority of people. Nevertheless it's a fact that there are people who for one reason or another do not have credit cards but still would like to now and then pay for something on the Internet.
I cannot see any technical reasons why a credit card would be necessary. A bank account ought to be enough. It might be slower because if there were no credit then there would have to be some kind of procedure to ensure that a sufficient amount of money actually were on that particular account.
Apart from that I really cannot see any problem in having a universal paying system that virtually any bank and any website with paid services could be part of. A universal system giving anybody with a bank account the possibility of paying a website for its services. But there does not seem to exist such a system.
What has skipped my attention?
I may be wrong, but I believe that most people over the age og 18 who have a bank account is able to get some sort of payment card with VISA, MasterCard or similar on it. When you open a bank account, you will usually be offered some sort of card.
You don't have to have a credit card, it can be a debit card to your bank account (like the Danish Dankort) with VISA, MasterCard or similar on it. VISA Electron is a debit card.
I think that the goal of VISA and MasterCard is to be "a universal paying system that virtually any bank and any website with paid services could be part of". VISA etc is a link between the customers bank account and the shop (online or not) that makes payment possible. I don't see any reason to invent yet another system when there are plenty around.
Or, you can offer payments through PayPal, for example.
Well, you not going to believe it, but sometimes even a credit card is not enought.
Yesterday I tried to sell a camera lens at ebay Australia (thats where I am at the moment).
To register as seller I need to verify my credit card by giving credit card billing address.
However the form only alllows to enter Australian adress, and my card is from overseas. So I cannot verify it.
To make it perfect - Ebay says that I can pay by cheque, money order, and direct debit. However to pay by those methods I need to register as seller first, to register as seller I need to verify my credit card address...
This issue has been long brewing.....it's a form of what some call eliteism. Only folks with credit ratings good enough for a credit card (and therefore making a certain amount of money) need participate with Internet transactions.
Even some ISPs will refuse folks an account without a credit card.
The Internet then becomes far from universally accessible.
The days are long gone when credit cards were restricted to the well-to-do, and only accepted by high-end department stores.
If anything, criticism is growing that it is too easy to obtain and use rolling credit; I recall one article covering a college student not even old enough to drink declaring bankruptcy with almost $40,000 in credit card debt. Having exhausted that market, credit cards are being tested on high school students. It's easy to get in trouble when you can charge tuition to your Visa and sometimes your rent to your Diners Club or American Express.
There are no technical reasons why a credit card would be necessary, but the protection the credit card layer provides is valued both by the consumer and the vendor. Public universities may need to pay merchant fees on those millions of tuition dollars, but at least they get the money, and without needing to worry about fraudulent or NSF checks-- those become the credit card company's problem (most private universities, where tuition is exponentially higher and whose student bodies tend to be wealthier, have not found credit cards worth accepting). And while I could type in my checking account routing number just as easily as my credit card number, I'd rather not have the money debited-- debit spending has fewer consumer protections than credit in the US, and so far no one I know has ever been denied a refund from a credit card company for an incorrect charge.
I believe most webmaster's don't want to be bothered with online checks due to
1) the long amount of time it takes for monies to be deposited
2) returned checks
3) Many merchant accounts will place a "reserve" on all check transaction (10-30%) which will cover any returned checks or "stop check" actions. These reserves can last from 3-6 months. This basically means 10-30% of all the monies transaction will be "held" for 3 months before it's credited to your bank account. There's just too much "risk" involved.
4) Many online services require credit cards because their service provides "immediate" accessibility
5) There aren't as many ACH/echeck merchant accounts available, when compared to credit card merchant accounts.
6) There isn't a great amount of shopping cart software which support ACH/echeck in any capacity.
7) accepting ACH/echeck typically requires a website to establish two merchant accounts: one for credit cards, another for ACH. This is difficult to plug into a shopping cart setup, without involving custom programming.
8) per transaction fees and percentage rates are considerably higher for check transactions when compared to credit card transactions.
9) Address verification for checks is non-existence for some merchant accounts, and very weak for others
10) no high level authentication system for checks, such as the 3 digit CID number on the back of credit/debit cards.
Those are some basic reasons for not accepting online checks. I'm sure most merchants would like to accomodate postential customers who can only use checks. I feel bad for those that have difficulty purchasing online items because they don't have a credit/debit card. If it weren't such a hassle and burden to accept checks I'm sure most merchants would support it.