How Credit Card Processing Works

There are a few different parts to credit card processing. It all starts with a debit card or credit card that is issued from the bank to the cardholder. The cardholder then will go shopping and use this card as their payment method during checkout. The merchant will accept the credit card and swipe it through the machine or keyin the number as they receive the information over the phone. The card then gets charged, the information is sent to the processing company then to the bank for approval of funds and then back to the merchant’s terminal showing an approval or decline. If the card is approved then payment will be transferred within 24-48 hours into the business’ bank account. A receipt will also begin to print upon approval.

If the transaction is being done in a retail store setting where the card is being swiped through a machine, it is considered a face to face sale. The merchant uses a credit card machine that connects with the phone line. Once a sale is made the customer hands their card to the merchant and they swipe it through the terminal. The merchant is then asked for the amount and the last four digits of the credit card. This verifies that the credit card being used is the actual real credit card. After this is completed, the information is sent to the processing company which checks the cardholder’s bank for the requested funds. If the transaction is approved then a receipt will start to print, if not, the machine will say declined. This whole process is done when the machine calls a toll free 800 number all within a few seconds.

Transactions that are non-face to face or internet/Moto transactions are done easily through an internet terminal. The business takes the order, which could be a phone, mail, internet or fax order and inputs all of their information into the secure virtual terminal after they have logged in. A virtual terminal can be used on any computer that has a browser and internet connection. There is more information that is required since the transaction is more prone to fraud. After submit is hit inside the gateway, it charges the card and the money is transmitted to the merchant’s bank account within 1-2 days. Power Pay Services is able to setup all merchants with retail and internet merchant accounts.

Setup a credit card processing merchant account today!