Credit Card Processing In Simple Steps

Posted by Brian Latch on January 28th, 2022

Credit card payments have become a common occurrence. Be it a fancy store or a small grocery store just around the corner, credit card payments are accepted everywhere. As a customer, when you make the payment, it takes mere seconds for it to reflect on your account. However, what you see is just the tip of the iceberg. A lot goes into it when payments are executed. In this article, we are going to try and explain credit card processing in simple steps.

  • When a customer makes a purchase, he or she decides to use a credit card to make a payment.
  • The person at the counter then swipes or taps the card on the machine provided by the credit card processor and service provider.
  • After the card is swiped, the process begins. The merchant collects the credit card data.
  • Once the data is collected by the merchant, it is then forwarded to the next entity via an online credit card processor. The information is then sent to the cardholder’s bank, which is also known as the issuer bank.
  •  When the data is transferred to the issuer bank, the bank then verifies if the customer has enough funds to go on with the transaction. The bank will then tell the processor if the transaction is approved or denied.
  •  Once the transaction is approved, the merchant receives a notification about the transaction is successful. Only then does the merchant hand over the purchased item to the consumer.
  •  The final step is where the funds are transferred from the issuing bank (customer’s bank) to the acquiring bank (merchant’s bank).

All of these things happen within a minute, thus making the process simple and convenient for the customer as well as the merchant. We hope you have now understood the basics of how it works.


Brian Latch

About the Author

Brian Latch
Joined: May 12th, 2020
Articles Posted: 51

The ONLY Vital Credit Card
Earn 5% Cash Back on all of your purchases plus additional cashback for sharing the offer with your friends and family! This is the ONLY credit card you need! Competitive APR's, No annual fee, Elegant Metal Card Design!
Uhive A New Era of Social Networking
Introduces a new dimension to the world of decentralized social media based on crypto!
BitKong: Fairest and most thrilling Bitcoin casino on the market
Win serious funds fast when you stack the BitKong bonus combo, cash in on the referral program, or hit the massive jackpot then walk away with your life changed.
Bilaxy
The World's Leading Crypto Asset Trading Platform
YoBit Crypto Exchange
Register Now and get 1700 Free Dollars! Buy and sell Ethereum (ETH) on YoBit Exchange!
CryptoBits.Directory - Your Gateway to Crypto!
Directory filled with some of the best crypto based websites and exchanges available! Signup and get a copy of your own free referral directory!