Credit cards are the big brother to debit cards, which are still seen as the new kids on the block when it comes to consumer spending habits. It is indeed true that credit cards, for the most part, trump their plastic counterparts when it comes to which card type is employed more often for purchases and charges. After all, they augment the credit card user’s purchasing power beyond what their regular income would allow on its own, and they imbue the user with a certain level of prestige and honour. Debit cards, however, can work just as well as credit cards when it comes to their contribution to the consumer marketplace, and that includes both card user and merchant at the same time. Below is a list of ways that debit cards can be used to help local businesses.
Debit cards help local businesses save time and better track their transactions
Cash payments must always be reconciled by hand, with clerks and cashiers adding up the money in their respective drawers and making sure that it matches the total of all printed receipts. As one can imagine, such work if often tedious and time-consuming, taking several hours away from other very worthwhile duties that employees could be engaged in. More than just the time that is required, however, cash and cheque payments make it much more difficult to track expenses later on should the merchant need to locate a particular transaction. The only thing more tedious than reconciling a cash or cheque expense by hand is locating that expense once it has been archived. But debit cards relieve much of this tedium by allowing for transactions made with the cards to be electronically stored the instant that the charge is verified. As an added security, most of the time that a charge is made using a debit card, the transaction is recorded in both the merchant’s files as well as the merchant’s bank’s files, leading to a double record.
Debit cards help local businesses by allowing them to accept international purchases
Most debit card holders are able to use their cards overseas, thanks in large part to the major credit card company logo which now adorns most debit cards. This is useful to card holder because they can use their choice of card to make a payment while travelling, thus ensuring that they will not be forced into carrying cash or traveller’s cheques. It is mutually beneficial for merchants who accept debit cards as well because they can then service the card holder and not lose out on the sale. Debit cards aid the merchant in more ways than simply not turning away a customer, however. When a debit card user does employ their card whilst in a foreign country, there are currency conversion rates that will apply. These conversions include exchanging the money from the host country’s currency to the card holder’s native currency in order to ensure an accurate payment. These fees and penalties for currency conversion are never passed along to the merchant, but are rather charged to the card holder. In this way, merchants can accept the debit card payments of tourists while resting easy about dodging any related fees.
Debit cards help local businesses safeguard against needless chargebacks
Because debit cards tend to be verified with a personal identification number (PIN), the merchant is able to avoid needless chargebacks by first verifying that the account exists and then confirming that there are sufficient funds to complete the transaction. Without such measures, card holders would be able to initiate more chargebacks and receive refunds on services and goods already rendered.