Coronavirus outbreak has made a remarkable change in the entire ecosystem of online payment. Small merchants are making online shift in order to cope up with the present competitive situation. However, economic experts have though that people will give more importance to credit card transaction due to the economic pressure.
According to the data shown by TransUnion Canada, credit cardholders in Canada have not made huge transaction using credit cards amid COVID-19. They lost interest in taking additional credit card debt. In addition to this, credit card agencies have also shown their report. According to them, the credit card balance has fallen by 13 percent. They have compared the present report with the report of the previous year in order to determine the result.
Well, Matt Fabian from TransUnion has got the answer of this downfall. According to him, COVID-19 has already flattened the growth of many business. Due to the lockdown, many merchants closed their businesses and as a result, people had not got much spending opportunities. Moreover, many people in the U.S. and Canada have lost their job and therefore, in such a critical situation, they do not want to take any additional burden upon them. They are giving more importance to their retirement funds or savings funds instead of credit cards.
In addition to this, the number of card applications also goes down amid lockdown. The main reason behind it is the unemployment. Yes, people are losing their jobs and there is no settled job available for them.
However, according to the TransUnion, there is a remarkable rise in the mortgage debt. The number of refinances, mortgages and renewals has been increased rapidly. The overall mortgage debt is increased by 5.3 percent. TransUnion has gathered information from national Consumer Credit Database.
Credit Card Transaction Process
Well, knowing the card transaction process is very important to get rid of additional credit card debt. The process is as follows:
Customer generally makes their online bill payment with credit cards. After that, the merchant processor solution gets the transaction details through the online payment gateway. It is a very secured process. The processor shares the information with the credit card company. The company sends the information to the bank. The bank finally checks the available credit and takes the final decision. Then, the bank sends the information to the credit card network. The network shares the same with the merchant processor. So, this is how real-time credit card transactions work.