1. Different checkout methods:

Credit card prepayment generally refers to the customer delivering money directly to the service operator. Credit card prepayment is a temporary freezing of funds without actual consumption. It is equivalent to paying a deposit for consumption, but it is more convenient than paying a deposit because the cardholder does not have to actually come up with money.

Prepayment settlement is a settlement method of currency paid in advance for services or products that are allowed to be provided.

2. Different advantages:

Compared with cash and debit card, credit card prepayment has obvious advantages. Take hotels as an example. The cardholder swipes the card at the hotel front desk for pre-authorization when checking in, and only freezes a certain overdraft limit on the cardholder's card. The actual consumption deduction and settlement will be made when the cardholder leaves the hotel.

The characteristic of advance payment is that there is no limit on the amount; advance payment is part of the payment in the main contract, and the agreement between the parties on advance payment is promissory in nature and does not require actual delivery as a requirement for effectiveness; advance payment is the price An advance payment of one part is still liquidation in nature;

The advance payment does not have the effect of a two-way or one-way guarantee. When the contract is terminated due to the failure of the parties to perform the contract, the advance payment shall be returned. The parties' liability for breach of contract is determined by other clauses agreed in the contract. If there is no agreement on liability for breach of contract, they generally will not be liable for breach of contract.

Extended information:

Purpose of advance payment:

1. To solve the shortfall of working capital of one party to the contract.

2. Sincerity as a performance of the contract.

Disadvantages of advance payment:

It is not beneficial to the buyer and is generally used when the supply of transaction goods exceeds demand. The buyer has to bear the commercial risks and backlog of funds, which is actually providing credit to the seller; while the seller receives payment before shipment, which is conducive to capital turnover and has no commercial risks.

There are two situations of advance payment: one is used as a guarantee for the importer to execute the contract, usually called a deposit. The advance payment period is short and accounts for a small proportion of the transaction amount; the other is the importer’s guarantee for the execution of the contract. Exporters provide credit with longer advance terms and larger amounts.

Baidu Encyclopedia-Prepayment

Baidu Encyclopedia-Credit Card Pre-Authorization