There was a time when all purchases were paid for with cash money, or through the trade of other items that were worth the equivalent of the cash money. Then it became popular for people to carry blank checks with them and use those checks in place of cash money. Then the credit card became a useful tool and suddenly the merchants had to have the means of scanning those cards for information and getting the information to the financial institutions that issued the cards. This sort of payment processing sounds very complicated, but in truth it is pretty simple to understand.
Payment processing begins with the customer selecting an item and deciding to purchase that item. The payment from the customer can be made in the store through a payment gateway or over the phone.
When the credit or debit card is swiped by the merchant the transaction is being entered and the payment processing is beginning. The customer will be asked to verify whether they are paying with a credit account or with a debit account.
The data from the card will be sent to the financial institution along with the amount of the purchase the customer is making. The financial institution will ask the customer to enter a pin number to verify they are the one authorized to use the card, and once that information is keyed in you will wait for approval of the purchase.
The acceptance or denial of the transaction will be made by the issuer of the card being used. They will approve the transaction if all of the information they received is correct and the account in question has ample funds to cover the cost of the purchases being made. They will deny the transaction if the account does not have enough funds for the transaction or if any of the information they received was questionable. Sometimes the card has to be swiped a second time and the information re-transmitted before the card issuer releases approval for the purchases to be made.
Once the issuer has decided whether or not to accept the charges pending they will send authorization to the merchant terminal. At this time the merchant will complete the sale and have the customer sign the receipt for the purchases.
At the end of the working day the merchant will complete the final steps of the payment processing when they close out the daily transactions. The bank that the merchant uses will collect the daily totals from the card issuer and deposit the proceeds into the merchants account. Generally there is a forty eight hour period between the time the customer makes the purchase and the merchant's bank makes the deposit into their account.
Some credit card companies only accept purchase totals for a period of thirty days at a time instead of on a daily basis. The merchants often charge a slight amount more on purchases made with credit cards because of the amount of time they will have to wait for payment.
Payment processing for credit cards and debit cards is not as complicated as you might think. The equipment that the merchant installs to read the cards during credit card payment processing will do most of the work for you. You can get more info here.
Payment processing begins with the customer selecting an item and deciding to purchase that item. The payment from the customer can be made in the store through a payment gateway or over the phone.
When the credit or debit card is swiped by the merchant the transaction is being entered and the payment processing is beginning. The customer will be asked to verify whether they are paying with a credit account or with a debit account.
The data from the card will be sent to the financial institution along with the amount of the purchase the customer is making. The financial institution will ask the customer to enter a pin number to verify they are the one authorized to use the card, and once that information is keyed in you will wait for approval of the purchase.
The acceptance or denial of the transaction will be made by the issuer of the card being used. They will approve the transaction if all of the information they received is correct and the account in question has ample funds to cover the cost of the purchases being made. They will deny the transaction if the account does not have enough funds for the transaction or if any of the information they received was questionable. Sometimes the card has to be swiped a second time and the information re-transmitted before the card issuer releases approval for the purchases to be made.
Once the issuer has decided whether or not to accept the charges pending they will send authorization to the merchant terminal. At this time the merchant will complete the sale and have the customer sign the receipt for the purchases.
At the end of the working day the merchant will complete the final steps of the payment processing when they close out the daily transactions. The bank that the merchant uses will collect the daily totals from the card issuer and deposit the proceeds into the merchants account. Generally there is a forty eight hour period between the time the customer makes the purchase and the merchant's bank makes the deposit into their account.
Some credit card companies only accept purchase totals for a period of thirty days at a time instead of on a daily basis. The merchants often charge a slight amount more on purchases made with credit cards because of the amount of time they will have to wait for payment.
Payment processing for credit cards and debit cards is not as complicated as you might think. The equipment that the merchant installs to read the cards during credit card payment processing will do most of the work for you. You can get more info here.