The paper "Launching The Credit Card In Romania" Is a perfect example of a Finance and Accounting Case Study. A credit card is an electronically enabled card that allows its holder to make purchases and payments of goods and services with a promise of paying for them at a later date. A credit card industry requires the involvement of four main players and they are; the network also known as the card association, merchant acquirers, merchants and the card issuers. The network association connects the other players in the industry that is the merchants, the merchant acquirers and the card issuers.
They include companies like Visa and MasterCard. The merchant acquirers are those that distribute the cards. Their main role is to sign up merchants into accepting the cards as well as providing support to the merchants in processing card transactions, authorizing and settling payments, transmitting data and point of sale terminals. The other players that are the merchants and the card issuers accept the card payments and authorize payments as well as billing the card holders respectively (Rangan & Yong, 2012). Should Alpen Bank launch a credit card? Alpen Bank should launch a credit card.
With improved macroeconomic conditions in Romania, the people are earning more thus spending more. Consumer behavior theory states that increased income means consumers will have little concern for the price of goods and from this, the bank will earn more from interchange; a portion of the merchant’ s discount. The bank will earn more with increased transaction volumes. The improved macroeconomic situation in the country also means that there an increase in the number of middle and upper-class consumers (Rangan & Yong, 2012). According to Mansfield, Robb, and Pinto (2012), the number of people using cards to make purchases and payments has increased significantly as compared to using cash for their transactions.
This includes the use of both debit and credit cards for the transactions. However given the high population of Romania, it still leaves room for aspen banks to attract more clients using the right marketing strategies (Mansfield, Pinto & Robb, 2012). Benefits of using credit cards To cardholders Credit cards are incredibly convenient to the cardholders, this is because credit cards will help save the time of the users and spare them the effort of finding ATM (automated teller machines) outlets of carrying cash around for running their transactions.
Unlike debit cards that most people use for purchases and cash withdrawals credit cards do not require users to find automated teller machines to make withdrawals or even waste time making queues as they wait for their turn to withdraw. This sense of convenience to the users will act as an incentive to get more people to sign up for credit cards thus giving aspen bank yet another reason to launch the credit card. Credit cards help consumers to be able to track their expenses.
This will enable clients to establish an expenditure pattern. It will also enable the bank to determine their best clientele and the kind of clients they need to convince to sign up for credit cards that is their target market.
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