Credit card processing is intricate regardless of what credit card processor a business owner chooses because this process must be secured from beginning to end. The process always begins at the customer and the business. Why is this always the starting point? When the customer pays for his or her service/product to the vendor, that payment is then transferred to the terminal usually through the Internet. After the gateway has done so, the payment is then forwarded onto the merchant bank processor.
While at the processor, the payment is submitted into the credit card network, awaits clearance then once cleared the payment returns to the terminal and goes onto the customer’s credit card issuing bank. Once at the issuing bank an authorization request is made. That request includes usage of the credit card number, expiration date, and all card information including security data for verification of payment. Once complete the issuing bank can either submit or decline. In most cases, it will submit (i.e. validate) through the network to the merchant for customer purchase. The amount of payment does get sent to merchant’s bank account. In essence, this will complete the transaction of sale and between merchant and customer.
It can be difficult to grasp how credit card processing takes place but in essence it is not as difficult once considering how simple the flow of money can move. How credit cards are paid is actually quite simple. Credit card vendors will ascertain their % from the fee that is paid by the merchant in many cases. For example if a merchant purchases $50.00 worth of goods using a credit card at the end of the transaction, the credit card bank will obtain % fee of $50 from the merchant. Most credit cards are 2-3% however there are some credit card vendors that can charge a higher percentage.
Tired of your current processor or interested in working with a company that cares about your needs? Sunlit will always go above and beyond for your company every single time. Contact us and get started today.