Payment solutions for Apps and Websites (2): Credit-, Gift- and other cards

Payment solutions for Apps and Websites (2): Credit-, Gift- and other cards

February 19th, 2013 By: Stefan von Gagern
As the smartphone will be a digital wallet and mobile shopping is growing, payment options for apps and websites rise to be of the crucial success factors for businesses. In our series of articles we cover different payment solutions for your apps or websites. This time we’ll look at plastic cards.
Payment solutions for Apps and Websites (2): Credit-, Gift- and other cards

Last time we covered payment services like PayPal or ClickandBuy, this time we’ll focus on the card money. Credit cards are very popular in online shopping. According to “E-Commerce Leitfaden”, credit cards rank in the top 5 of the most seen payment options in online shops. Since 2010 credit cards are also highly acclaimed by german shoppers. About 44 percent of german shops support credit card payments.

Simple and fast

There are reasons, why shoppers like credit cards. They are impulsive. If you like something you can buy it immediately – the checkout is done in minutes or seconds, if you’re using a personal account and something like amazons “1 click”-orders. Other payments like transactions or invoice require much more effort. Shoppers also like that the order can get shipped immediately, but will be effectively paid at the end oft the month, when the money is due on their bank account. The other fact that makes credit cards so popular is the easy way to buy goods in international online shops. Germans for example like to order at eBay or Amazon US and simply pay, using the same user account and their Master or Visa Cards.

If you pay using your credit card you have to enter your name, the month and year the card is due to and a three digit check number. This is very sensible data. So many clients check before submitting if your shop provides proper data handling. They won’t submit it to vendors they won’t trust. If you’re new to the business credit card payment is great but alone not the best option. Not everybody has a credit card in some countries like Germany and not everybody of those, who have a card wants to enter their numbers into you shop. For the first order you should provide alternatives like PayPal or ClickandBuy.

After submission the data is transferred to a credit card acquirer for validation. The acquirer handles the credit card business for the vendor and checks the authorisation, as well as the booking of credit card payments. If validated successfully you get a code that authorizes the existence of your credit card account and the amount for payment. The acquirer transfers the amount to the client’s credit card account including additional comments. The money is transferred to the merchant and the acquirer gets a fee for every transaction.

Prepaid Credit Cards

Prepaid credit card
The prepaid credit card is very safe, but also an expensive way to spend your money. (Source:

A prepaid credit card is not a true credit card like Visa, MasterCard, American Express or Diners Club – though it carries the credit card brand. No credit is offered by the card issuer. The card-holder or someone else like a parent stores money via a deposit.
Prepaid cards were developed for minors. Another advantage is that the cardholder is not required to prove his creditworthiness before opening an account. Prepaid cards are also great for online shopping. They are very safe, because you won’t have to use “real” credit card data for purchasing goods.
Usually you can use prepaid cards mostly for online shopping, but also at some terminals.



Purchasers are often charged a purchasing fee plus fees per month or year – which makes the prepaid cards expensive, compared to classic credit cards. While credit cards are often offered for free you have to pay around 20 to 70 euro per year for prepaid cards.

Debit Card

A debit card (also known as bank card or check card) provides electronic access to your bank account at a financial institution. Most cards have a stored value with which a payment is made. For payment you need the plastic card and a terminal that supports debit card payment. For online shopping these cards are almost useless: You’ll need a special device for reading your card at your PC, which in fact almost nobody has. In Germany there also is a maximum for transactions at 200 euro. The debit card is mostly used for small amounts – according to Wikipedia around 3 euro per transaction. The original idea was to replace the cash in your pocket. Some advantages are that for payment you won’t need a PIN-number and no internet connection. The balance is stored on the cards chip.

Gift Cards

Gift cards
Gift cards are money for one special shop or store, printed on plastic. (Source:

You’ve seen gift cards from iTunes, Amazon and others, but there are many more of them, as websites like prove. In Germany the website Geschenkkartenwelt lists around 400 different cards from online-shops, supermarkets, ticket vendors, clothing companies and many more. Gift cards store an amount, but are in comparison to prepaid cards not attached to a person. You can redeem gift card codes in only one location, for example the iTunes Store, Spotify, Facebook or Amazon. You won’t need the card or a device for redeeming, just a printed gift code in most cases. So you can also get virtual gift cards by E-mail or send the code to someone else.