Understanding The Processing Of Credit Card

If you want to make your business process faster and convenient for your customers, then you must include credit card processing for your business. It will save time for both you and your customers. Nowadays, people don't like to carry cash in their pockets; most of them use online payment method or card payment. For availing this credit card processing facility, you need to have a credit card terminal machine for swiping the credit card.

Most businessmen, who haven't availed this service, think that credit card processing is not reliable because they don't know the working of it. What eyes see are easy and simple steps, just sliding the card and signing the bill. Though the payment ends in only a few seconds but there are multiple stages involves in it. The whole transaction can be summarized in three stages:

1- Authorization: When a customer's card is swiped in the machine, the details are sent to that card's particular bank. The bank then transfers the information to the credit card network, the network then clears it and requests authorization of the payment from the issuing bank.

2- Authentication: When the issuing bank receives the authorization request from the credit card network, it validates the number of credit card, amount available in the account for payment, checks billing address and validates CVV number. After the authorization is received by the merchant, the bank transfers the amount. The terminal receives the approval and receipt is generated. This authorizations that are approved are processed in a batch.

3- Settlement: At the end of the day the merchant sends the batched information to the processor. The network transfers each approved transaction to the issuing bank. The issuing bank pays the approved amount. In the end, the merchant receives the payment.