The Ultimate Credit Card Payment Processing Steps

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Signing the credit card bill slip and swiping the credit card seems so complicated yet straightforward because a wide array of things is happening at the backend. Behind the scenes, there are multiple activities going on simultaneously to ensure your shopping cravings are fulfilled without having to go to the ATM. With these trends, consumers are actively looking for business platforms that accept credit card payment.

Who Is Involved In Accepting Card Payment?

When it comes to accepting card payments, there are multiple entities involved to ensure optimal payment cycle and transaction, such as;

  • Customer – the person who is presenting the credit card for paying for orders
  • Merchant – the person who is selling the products or services
  • Credit card payment network – the connection between the credit card issuer and merchant bank
  • Merchant bank – the bank through which the bank sends out the transactions for approval (credit and debit card)
  • Credit card issuer 0 the person who pays and approves the transactions

In this article, we are sharing the complete process of credit card transactions along with authorization and approval. So, let’s have a look!

Swipe Up The Credit Card

When you make a purchase, you don’t have the cash, so you present the card for payment for swiping it through the payment terminal. The payment terminal will connect to the merchant bank. The purpose of this connection is to ask for the approval if it’s ready to make the credit card transaction for purchasing.

Authorization of Credit Card

The merchant bank will contact the credit card network for gaining authorization for the credit card buying of products or services. The credit card networks include Discover, Visa, American Expresses, and MasterCard. Once the network is contacted, the payment network will contact the credit card issuing bank. This step is taken to ensure the validity of a credit card and if there credit available for making a transaction.

The Discover and American Express are the payment networks that approve the transactions regarding credit cards. On the other hand, MasterCard and Visa contact the credit card issuer, but they don’t issue the credit cards. The credit card issues will send back the authorization code. If there isn’t enough credit, the request will be declined.

With this decline, the point of sale will be diminished without reflecting the reason. In this scenario, you will need to contact the issuer to check the cause of the decline.

Approval

Once the merchant bank is contacted, they will send the approval message for purchasing through a credit card. Once there is an approval message, the receipt will be printed, and you are required to sign the slip and make the purchase. The credit will be authorized for payment once you sign the receipts. This means that the merchant will get the money while money won’t be charged from the account.

On the other hand, you might receive a systematic transaction message as some issuers have a streamlined system. In such cases, the credit will be charged from the account.

The End Processing

Then, there is batch processing on the merchant’s end, and by the end of the month, the shopper will pay the bills at the bank!

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