Query About E-Shopping
- Thread starter krishnandu
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Let me explain how the system works --
Here are the participants:
1. Card Association - Visa or Master Card
2. Issuing Bank: The bank that issues the card to you and collects the payment at the end of the month. Example: ICICI, Citibank
3. Merchant: The shop or store that accepts your card
4. Acquiring Bank: The merchant has his account in this bank. So for example, Pantaloons bank account is HDFC, the place where the payment you make is credited.
Now at the point of sale, i.e. the payment desk of pantaloon, say you are paying for a shirt worth Rs. 100. The employee swaps your card in the machine. The machine passes your account info to the acquiring bank i.e. HDFC, HDFC then forwards this info to the Card Association which then forwards it to the issuing bank i.e. the bank that gave you the card, in this example - ICICI. The issuing bank checks your history, sees your limit and then if all is good sends back the authorization in the same cycle back.
Now, for Rs. 100 this is how the money flows electronically. Rs. 98 is debited to the merchant or the acquiring bank, which then debits Rs. 97.9 to the merchants account. Also the issuing bank gives Rs. 0.2 to the card association i.e. Visa
Here is the division and why -- Rs. 2 by the Issuing bank deducted from the cost price of Rs. 100, because the issuing bank takes the biggest risk in case you default it has to absorb the loss
The rest, Visa and the merchant's bank or acquiring bank are taking facilitation fees.
Visa is the card association and makes the rules for the division of money. It has to makes rules so that all parties are interested i.e. the card user, issuer, acquiring bank, the merchant and lastly itself
Bottom line is, if you are eligible for a credit card, that doesnt charge you annual fees, and you can afford to pay your monthly bills on time and shop at stores that dont charge you for using a credit card as a method of payment, YOU SHOULD USE A CREDIT CARD !!!
That is because, you get a lot of benefits. The issuing banks gives you a lot of offers and also gives you points that you can redeem. The issuing bank can afford all this because it is making money from the merchant on your purchases and can pass back some to you for the loyalty.
I hope it clears your doubts.
Here are the participants:
1. Card Association - Visa or Master Card
2. Issuing Bank: The bank that issues the card to you and collects the payment at the end of the month. Example: ICICI, Citibank
3. Merchant: The shop or store that accepts your card
4. Acquiring Bank: The merchant has his account in this bank. So for example, Pantaloons bank account is HDFC, the place where the payment you make is credited.
Now at the point of sale, i.e. the payment desk of pantaloon, say you are paying for a shirt worth Rs. 100. The employee swaps your card in the machine. The machine passes your account info to the acquiring bank i.e. HDFC, HDFC then forwards this info to the Card Association which then forwards it to the issuing bank i.e. the bank that gave you the card, in this example - ICICI. The issuing bank checks your history, sees your limit and then if all is good sends back the authorization in the same cycle back.
Now, for Rs. 100 this is how the money flows electronically. Rs. 98 is debited to the merchant or the acquiring bank, which then debits Rs. 97.9 to the merchants account. Also the issuing bank gives Rs. 0.2 to the card association i.e. Visa
Here is the division and why -- Rs. 2 by the Issuing bank deducted from the cost price of Rs. 100, because the issuing bank takes the biggest risk in case you default it has to absorb the loss
The rest, Visa and the merchant's bank or acquiring bank are taking facilitation fees.
Visa is the card association and makes the rules for the division of money. It has to makes rules so that all parties are interested i.e. the card user, issuer, acquiring bank, the merchant and lastly itself
Bottom line is, if you are eligible for a credit card, that doesnt charge you annual fees, and you can afford to pay your monthly bills on time and shop at stores that dont charge you for using a credit card as a method of payment, YOU SHOULD USE A CREDIT CARD !!!
That is because, you get a lot of benefits. The issuing banks gives you a lot of offers and also gives you points that you can redeem. The issuing bank can afford all this because it is making money from the merchant on your purchases and can pass back some to you for the loyalty.
I hope it clears your doubts.
REGARDING NOT WITHDRAWING MONEY FROM ATM:
The bank will levy interest straight away on the money withdrawn and it will be in the range of 3-4 % a MONTH (a whopping 40% an year). That is how the bank covers risk and makes money too. So no withdrawal of money from ATM.
I guess the Visa Debit card with a CVV value at back is as good as a credit card. The cards in UK have it while most debit cards which I used in India didnt. I dont know if they have changed that now.
On a side note: Can we try to get a TE credit card made in affiliation with the online e-stores
on lines of pantaloons credit card etc. Would be really enjoyable and kinda exclusive too... (know its highly unlikely, just a thought)
The bank will levy interest straight away on the money withdrawn and it will be in the range of 3-4 % a MONTH (a whopping 40% an year). That is how the bank covers risk and makes money too. So no withdrawal of money from ATM.
I guess the Visa Debit card with a CVV value at back is as good as a credit card. The cards in UK have it while most debit cards which I used in India didnt. I dont know if they have changed that now.
On a side note: Can we try to get a TE credit card made in affiliation with the online e-stores
on lines of pantaloons credit card etc. Would be really enjoyable and kinda exclusive too... (know its highly unlikely, just a thought)
Lol...!! Thanks everyone...!!
So can I go for both Debit Card and Credit Card?? No problem in that case I think.
One more question...from my common sense I can guess that for getting Debit Card from a bank, I need to have a/c in that bank as the money will directly be transfered from my a/c.
What about Credit Card?? Do I need to have an a/c in the same bank to get credit card from them??
I've a/c in SBI. And SBI Yuva Card looks nice as Debit Card. It's associated by VISA I think. What about Credit Card?? Is SBI any good in this regard??
So can I go for both Debit Card and Credit Card?? No problem in that case I think.
One more question...from my common sense I can guess that for getting Debit Card from a bank, I need to have a/c in that bank as the money will directly be transfered from my a/c.
What about Credit Card?? Do I need to have an a/c in the same bank to get credit card from them??
I've a/c in SBI. And SBI Yuva Card looks nice as Debit Card. It's associated by VISA I think. What about Credit Card?? Is SBI any good in this regard??
Party Monger
Juggernaut
Guys going to open a new account for transferring money and using sites like deal extreme, Paypal and ebay india, can anyone tell which bank will be the easiest to use for this purpose? Would prefer no minimum balance limit..
^ They didnt say anything like that when I opened the account. Infact my initial deposit to the account was through a cheque from my ICICI account. Anyway it was about 2 years back, but try going to a semi urban or rural branch and you'll have a higher chance in getting the NoFrills account.
Party Monger
Juggernaut
Yeah i dont have any account, so will try on monday, btw is it usable with deal extreme, paypal and ebay?
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