Simple Steps Of Credit Card Processing Explained

Posted by Brian Latch on October 4th, 2021

We often go to a store to shop for some things. At the cash counter, we ask the cashier whether or not they accept card payments. And when they nod with a yes, we instantly take out our card, ask them to swipe it, and et voila, we can walk out with bags full of goodies. Easy, isn’t it? While a lot of us use credit and debit cards pretty much every single day, there are a lot of us who have no clue about how credit card processing works. In this article, we are going to explain the simple steps of online credit card processing.

•          To begin with, we find a product we wish to purchase and choose to pay for it via a credit card.
•          The merchant will then swipe or tap your credit card. This will begin the communication with the merchant bank.
•          The merchant bank then sends the card detail to a payment processor and contacts the payment gateway in order to authorize the purchase.
•          The issuing bank checks whether or not the customer has enough funds to make the purchase and either allows or denies the payment request.
•          Once the issuing bank approves the charges, the information is relayed back to the merchant, wherein he hands over the products to the customer.
•          Once the process is completed, the issuing bank (cardholder’s bank) transfers the funds to the acquiring bank (merchant’s bank). Thus completing the transaction entirely.

Who knew that something that takes mere seconds to complete has so many things going behind the scene. The next time you tap your card to make a payment, remember the effort that goes into it. We hope this article we prove helpful to you in the future. And let us know if there is anything else you want to know about.