Chip and PIN

Chip and PIN is the name of a government-backed initiative in the United Kingdom to implement the EMV standard for secure payments. There is also a similar initiative in the Republic of Ireland called Chip and PIN Ireland.

Until the introduction of Chip and PIN, all face-to-face credit or debit card transactions used a magnetic stripe or mechanical imprint to read and record account data, and a signature for verification. Under this system, the customer hands their card to the clerk at the point of sale, who either "swipes" the card through a magnetic reader or makes an imprint from the raised text of the card. In the former case, the account details are verified and a slip for the customer to sign is printed. In the case of a mechanical imprint, the transaction details are filled in and the customer signs the imprinted slip.

Fees charged to customers

The major fees are for:

* Late payments or overdue payments
* Charges that result in exceeding the credit limit on the card (whether done deliberately or by mistake), called over limit fees
* Returned cheque fees or payment processing fees (eg phone payment fee)
* Cash advances and convenience cheques (often 3% of the amount). Transactions in a foreign currency (as much as 3% of the amount). A few financial institutions do not charge a fee for this.
* Membership fees (annual or monthly), sometimes a percentage of the credit limit.
* Exchange rate loading fees (these may sometimes not be reported on the customer's statement, even when they are applied).

Credit (finance)

Credit is the provision of resources (such as granting a loan) by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay or return those resources (or material(s) of equal value) at a later date. The first party is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower.

Any movement of financial capital is normally quite dependent on credit, which in turn is dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds.

Credit need not necessarily be based on formal monetary systems. The credit concept can be applied in barter economies based on the direct exchange of goods and services, and some would go so far as to suggest that the true nature of money is best described as a representation of the credit-debt relationships that exist in society .

Credit is denominated by a unit of account. Unlike money (by a strict definition), credit itself cannot act as a unit of account. However, many forms of credit can readily act as a medium of exchange. As such, various forms of credit are frequently referred to as money and are included in estimates of the money supply.

Credit is also traded in the market. The purest form is the credit default swap market, which is essentially a traded market in credit insurance. A credit default swap represents the price at which two parties exchange this risk – the protection "seller" takes the risk of default of the credit in return for a payment, commonly denoted in basis points (one basis point is 1/100 of a percent) of the notional amount to be referenced, while the protection "buyer" pays this premium and in the case of default of the underlying (a loan, bond or other receivable), delivers this receivable to the protection seller and receives from the seller the par amount (that is, is made whole)