The Credit Card System Essay

663 words - 3 pages

First what is a credit card, what does it do and how is it used "A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holders promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user."http://en.wikipedia.org/wiki/Credit_cardThe credit card is used by Data from the card being obtained from a magnetic strip or chip on the card. Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed.This kind of system is used in just about every shop around the world and even from your own home over the internet. The credit card relies on a few information systems like the database, the server and the electronic verification system (EVS).The system participants and users role in this system is to agree to pay the card issuer. The cardholder indicates his/her consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a Personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a 'Card/Cardholder Not Present' (CNP) transaction.http://en.wikipedia.org/wiki/Credit_cardElectronic verification systems allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or Point of Sale (POS) system with a communications link to the merchant's acquiring bank.The information technology of the system includes data management, networking, engineering computer hardware,...

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