What is a virtual terminal

A virtual terminal is a terminal that can be used for processing any credit card transactions from any computer with internet access anywhere in the world. Virtual terminal can also be referred to as an online version of what is traditionally known as Point of Sale (POS) terminals for example the ones in the supermarkets, hotels and restaurants, retail clothing outlets and many other places.

Due to the increase in use of credit cards on online shopping and in order for these outlets to be competitive, it would be very important that they acquire the virtual terminal.

Competetive advantages of acquiring a Virtual terminal

• A virtual terminal enables the merchant to reach a wider market and therefore increase their sales. The merchant is able to increase sales volume when they acquire a virtual terminal as they are able to make online transaction for a wider market.
• Acquiring a virtual terminal makes the merchant have a competitive edge over their competitors. This is because the merchants are easy to access because of the online accessibility to their customers and potential customers.
• By acquiring a virtual terminal a merchant is able to grow in business by increasing sales, reducing the costs and growth in the profits of the merchant company. the merchant becomes more efficient and effective.

 Requirements for merchants who aspire to acquire a virtual terminal

1. The merchant acquiring the virtual terminal must have the capacity to handle  online transactions. The capacity will include computers and human resource. The question that will be raised is if the merchant acquiring the virtual terminal has the ability to securely and efficiently handle a series of tasks. These tasks that the merchant acquiring the virtual terminal will be able to handle include verification of each transaction, documentation of the transaction and processing of the credit card transaction.
2. The merchant acquiring the virtual terminal must have a very efficient data security system. The system should be secure and safe for the merchant to be able to acquire the virtual terminal.
3. Virtual terminal can also be acquired by the merchant if the merchant has a good reputation financially. This is to say that the credit rating of this merchant is good so as to be able to purchase the virtual terminal.
4. A merchant can also acquire a virtual terminal if the merchant has a wide network of outlets. It would not be prudent to acquire a virtual terminal if the merchant has only  one outlet.

Credit card Debt Relief Programs

All over the world, more and more people are finding it difficult to meet their financial needs. With an increase in the number of credit card debt relief programs and companies to work with, financial problems are now being professionally addressed.

In the market today, the new federal law on credit card debt relief has been a more appealing debt management relief option in the settling of debts for the consumers. These federal laws became effective on 27th October 2010, making it possible to and easier to settle debt s for a minimal percentage charge.

 Factors you should consider when looking for credit card debt relief programs

1. The way out offered by the credit card debt relief program

Is the company offering only one debt relief solution and do they have any other solutions if incase one does not work. These include having different selections of debt relief programs that will fit your specific needs.

2. Reliability of the company offering the credit card debt relief program

How long has the company you are dealing with been in business? And is the company reliable if you will be in need of it? Is the company allied to better business bureau and can you entrust in it? These are questions that must be addressed to determine how reliable the company is.

3. Price of the credit card debt relief program services

Get information on how the debt relief company gets the money to pay salaries.  Does it rely on the amount you save with them? What will the company charge you for the services?

Efficient Tips for Saving Money to improve credit card debt relief

When it comes to debts, most people end up struggling on how to pay back their credit card debt.  The tips listed below will help you change your spending habit and make you realize you can live a simple life free from credit card debts.

Do not acquire extra debt on the credit card

• Make payments for your credit card debts on time to stop the debts accumulating increasing the interest paid. This is a tip that most people tend to ignore  and which may probably make them put their credit cards away.

Use some of your investments

• It’s a wise idea for you to use part of your savings to clear off your credit card debt than to pay your debt with accumulated interests.  Interest accumulation makes it difficult for one to make timely payments on the credit card debts.

Cancel unnecessary expenses

• All the unnecessary payments for leisure like gym membership and other expanses that renewed yearly should be cancelled. This will generate extra money to pay for your credit card debt.

Review your weekly spending

• Make a review of your expenses weekly and have a record of your purchases to know where you can reduce your expenses and make savings that can be used increase your credit card debt relief.Get a loan against your life insurance

Those with  whole life insurance policy may borrow against the value of it. You have the option of repaying the amount in installments with no interests.

Reaching Credit Card Debt Relief will depend on how focused you are. You have to organize your self and plan on how you can repay your credit card debt on time to avoid accumulation of due amounts. Better planning and being  well organized is the key  requirement to reach credit card debt relief.

What is a prepaid card

prepaid card

A Prepaid card is a card that mostly works like a credit card or a debit card but it has to bee preloaded with money for the cardholder to spend. The card can be used in outlets that credit and debit cards are used.

Prepaid card advantages

• A prepaid card uses money that is loaded. This means it will not lead you to get into debt. Prepaid card can help manage your finances and the amounts loaded will be what is available for use.
• It does not matter whether you have a bank account or not, the applicant can access the prepaid cards when they purchase the cards. This card may be used to reach the unbanked masses in many countries.
• The prepaid card can be given to your children or wife while they travel. The card can be reloaded online for whatever amount is required as per the guidelines of the card company.
• Prepaid cards are faster to get since there is no credit check done.
• The prepaid cards are used to improve credit rating but the cardholder or the card company must give this account to the card reference bureau.
• The cardholder is able to load just what they require especially where they are suspicious of online fraud. Once the funds are depleted, the cardholder waits for the next time when they want to shop and then they load just what they require. This card is not linked to a current or savings account, so if a card is stolen, the money in the bank account is not touched and is safe.

Prepaid card disadvantages

• The prepaid cards have many charges that eat away at the available spending amount. Some companies have hidden charges and after the card has been used at a point of sale or ATM, a charge is debited directly in the cardholders account. Ensure to understand all the costs that are associated with the prepaid card that you get
• There is no cash back guarantee like for credit cards. When a prepaid card is used online, and the goods are not delivered or are damaged, some prepaid card companies do not insist that the cardholder get their money back.
• For those customers who do not like to go online, the prepaid card is seen as a problem since the cardholder is expected to get their balance online. They may be embarrassed if the transaction fails due to lack of funds.

A  cardholder has to be aware of prepaid card advantages and disadvantages of the product they have signed up for.

Credit and Debit Cards associations

Both MasterCard and VISA are in the process of opening Regional Offices in Kenya for Credit and debit cards.  Is this move by both organizations a sign of commitment to the region after years of neglect, or a response to the threat of their business model posed by mobile commerce? Mobile banking has taken over the day to day transactions of both individuals and corporations in Kenya.

The Kenyan market is unique in the payment space as mobile has leap frogged over all other money transfer and banking channels. Poor communications networks and infrastructure, coupled with the non availability of simple acceptance devices has been the cards’ down fall in many countries especially in Africa. The Automated Teller Machines and Point of Sale are expensive leading Mobile transactions taking over and to fill that void.

Many transactions in Kenya happen on a meal by meal basis with the corner shop and the informal sector have helped mobile commerce to outpace cards. The volume and value of transactions the mobile environment handles daily cannot be equaled by any other payment channel.

credit and debit cards’ have suffered declining competitive edge

The decision of whether this is a good thing for the banking industry depends on where one stands? Maybe not if you are a banker, while the consumers have a totally different view.  The flow of fees earned in the mobile space is also different to the card model. Corner shops prefer the mobile model as they earn revenue instead of lose it in the card model due to commissions paid out for card usage.

Unless the two giants in the card space rethink their model and come back with pricing and rules and policies that suit the local market, the future of Credit and debit cards looks bleak. Credit and debit Cards will become prerogative for the middle to high income people that travel and for tourists.

decision time for credit and debit cards’ business

The big guns need to urgently relook their Africa Strategy to ensure a brighter future. We wait to see how the payment industry will change and if the card associations realize that one size does not normally fit all. Credit and debit cards issuers and acquirers must customize the products to suit their corporate needs.

credit and debit cards

prepaid cards in Kenya

What are prepaid cards in Kenya

They are a type of debit cards. They differ from the usual debit cards in that they are prepaid while a debit card uses the money in your bank account. They are sold or given out mainly by banks and also by some individual stores or shops, especially in the western world. The cards are called prepaid because the amount to be used is predetermined by the cardholder and paid for in advance. This is convenient to the bank because it is able to collect and mobilize funds before it has to pay for the cardholders spend. Prepaid cards may be used as gift cards, salary cards, store cards and travel cards, to name but a few.

Features of prepaid cards in Kenya

A unique feature on some prepaid cards in Kenya is that they do not necessarily have to have a name printed on the cards. As the banking industry in Kenya evolves and the card business moves to a higher level, cards may be sold to customers from supermarkets and through Agency banking agents. They will be sold like the mobile phone top-up cards. They will be availed to all who need them especially as gift options. The prepaid cards in Kenya can be used in stores that accept the credit and debit cards across the globe.

The prepaid cards may be magnetic strip meaning they have to be swiped at a Point of sale machine. The alternative is to have the prepaid cards as chip cards, which means the information is held in a chip. Chip cards may be used on merchants that are not yet Chip because the default for these cards is the magnetic strip.

Prepaid cards may be denominated in local currency or in foreign currency depending on the financial institution that is issuing the cards.  The cards may be for local use only or they may be used internationally. The prepaid cards are usually re-loadable. Whenever more money is required on the card, the cardholder deposits more money in his card account.

Banks giving prepaid cards in Kenya

Not many banks in Kenya have started on this business line yet. There are three banks who currently give this service. The banks are Kenya commercial bank, Investment and mortgages bank and Bank of Africa.

As the prepaid cards continue to grow in popularity in most parts of the world, the banking sector in Kenya has to be involved. We should prepare ourselves for the competition that will be witnessed in the financial institutions as they get into the prepaid cards in Kenya.

credit card collections

Delinquency of the cardholder accessed by the credit card collections team

The credit card collections must assess the delinquency of the cardholder. A delinquent cardholder is one who has missed on at least one repayment on their credit card bill. The credit cards have a date on which a cardholder must make payment by or before. Where a cardholder misses the deadline, they are said to be delinquent.

Credit card collections teams collections options

The credit card collections team makes the decision on which collection option they will take to collect on the delinquent cardholder.  The collections team makes a decision to either collect the debts in-house or to outsource the debts. Outsourced debts are those that are given to a different debt collection company to collect on behalf of the card company. The debt collection company is paid a commission of the collected debts. The credit card collections team may decide to debt collect using the debt collectors employed by the card company.

The decision to outsource debt collection is usually due to the time it takes to collect the debts and the expertise that is required, which the card company may not be willing to engage. The card companies mainly outsource the debts that are past six months old, where interest can no longer be recognised as profits for the card company.

Account sorting decision by the credit card collections team

The collections team sorts the cards using various criteria depending on the credit card collections team. The accounts may be sorted according to accounts that are ranked as high risk and are likely to end up delinquent. Sorting decisions are not always time based. Where the amounts are large, the period of delinquency becomes irrelevant. The huge debts must be collected first and most effort is concentrated on this option.

Like all credit card collections decisions, the methods and ways of ensuring that cardholders do not eat up all the profits by being delinquent is key. The card companies must engage the right methods and decisions in order to maintain a healthy balance between the credit they give out and the collections they make on the same credit. When credit card collections teams make wrong decisions, card companies make untold losses and are sometimes forced to close down.

A credit card is a loan that is given by the bank but the monies are loaded to the card account and not a bank account. A credit card account is usually held in a credit card management system, which may be different from that of the core banking in kenya system.
Banks or Financial institutions subscribe to the owners of the  Credit card/s trademark. They are given the license to run the Credit card/s as per the association rules and regulations at set fees. Visa and MasterCard are examples of such associations. The associations facilitate the purchase and payments networks, so they work like clearing houses.

Credit cards may be chip or magnetic strip.

A chip card means that information of the account is held in a chip. A magnetic strip card is one where the information is held at the back of the card in a magnetic strip. As cards are migrated from magnetic to chip, the cards may have both features present in the plastic.

In some instatnces the credit cards are virtual cards meaning there is no physical card. These category of cards are maily used for internet and the details of the card account are what is availed to you.

Requirements for aplying  for a Credit card.

You can apply for a credit card by completing the application form. You will be required to furnish the bank with original documents that identify you, where you leave and sourse of income. Using the identification documents, the bank is able to chech on your credit worthiness. If the applicant has handled loans in a good way and makes timely repayments as required, then the credit worthiness is high, if on the other hand you have mishandled loans given to you, your credit score is low. When the credit score is low, the following actions may be taken against you by the Bank;

• you may be denied the credit card facility,
• Your application may be deferred until the score improves. Usually a time period is given for this,
• Your application may be processed but the limit advanced is very low,
• Finally, you may be asked to secure the credit card by placing a fixed deposit with the bank.

In conclusion, anyone can apply for a credit card but they have to show steady income that is due to them. It is easier for an employed person to access credit card facilities than a self employed person.

A few years back the terms or names ATM and ATM Cards were foreign to most Kenyans. As banking in kenya developed,  ATM’s were introduced in the country, and became it was common to see service representatives (mostly beautiful young ladies) at the ATM lobbies. These ladies would explain what an ATM and ATM card was and what one needed to be able to use the machine.

ATM Cards and access

ATM Cards are used to access ATMs. The Cards are also used to purchase goods and services. With the advent of new technology, the ATMs can be activated with the use of a PIN for Mobile access.

9 things you need to know about ATM cards:

1. Do not store your ATM card with your PIN. Memorise the PIN number and destroy it.
2. The ATM card must be inserted in the right way. If the card is not positioned right, it will not get into the card slot on the ATM machine. Most ATMs have an arrow that points the directions as to how to insert the plastic.
3. The ATM card can be removed or ejected if you do not remember the PIN number. There is a button that allows cancelation of the transactions.
4. The ATM card must be valid and current. the ATM cards have an expiry date on the face of them. When the card is expiried, it will be ejected when you attempt to use it.
5. Do not use an ATM when there is a person too close to you. they may be able to see your account Balances and follow you.
6. Do not trust your PIN number to another person. Protect your ATM card at all costs.
7. where you have a joint account, each of the account signatories should be issued with their own cards to access the cash machine.
8. In case your ATM card is retained by the ATM machine, ensure to get a receipt or acknowledgement from the Machine. In case of fraud this receipt is used as evidence.
9. The ATM card has a magnetic strip at the back which when affected renders the Card useless. do not therefore store your cards with the backs facing each other or next to your cell phone.

Ensure that you protect your ATM cards so that you are able to use it with minimum negative experiences.