An Overview of Credit Card Processing

Selling products or services online? Don't be surprised when you encounter some challenges. For one, you first need to set up and maintain a system for payment authorization and transaction management. And this system should be secure and cost-effective. It should also allow you to accept payments in real time. So what's the ideal solution? For real time payment, you may want to set up a system that approves card process instantly.

A real time credit card process system works as a payment service through a safe and secure transaction server over the Internet. Businesses, or merchants, with a valid merchant account use this system to submit, approve, capture, and settle transactions that use credit cards without having the need to use a processing software or separate terminal for transaction.

So how does this system works? Simple. Once the merchant makes a sale and swipes the purchaser's credit card, the card number and amount, as well as the merchant ID, pass through the card processor's network. This credit card processor can be a bank or a company that specializes in providing credit processing services.

From the processor's network, the transaction then goes to a credit computer network. If the client is using, say, Visa, the transaction will enter Visa's network. The transaction eventually reaches the bank that issued the card. The bank would then check the account and confirm if the client has enough credit to cover his or her purchase. If it is approved, the bank then sends an authorization for the merchant over the network.

As the business day ends, the merchant sends the complete batch of charges for that day to the credit card network for processing. The transactions are sent through the merchant's credit card processor. All the transactions are then stripped out individually and sent back to the banks of the corresponding cardholders. The banks will then deduct the charges from the cardholders' accounts.

Finally, the credit card processor credits the merchant's bank account for the transaction amount, deducting its fees for the transaction. Those fees will also be directed towards paying transaction fees to the bank that issued the card and the credit network. The merchant's account will be credited after two business days at the most.

If you would like to understand more about credit process, how it works, how it can benefit your business, and how you can get started. You can find the specific answer to your question through the Author's Link below