Credit Card Payment Processing — How It Works

HOW II WORKS CREDIT CARD PAYMENT PROCESSING STEP ONE <> WHEN THE CUSTOMER CLICKS THE "CHECKOUT" BUTTON, THEY ARE SENT TO SECURE SERVERS TO COMPLETE THE CHECKOUT PROCESS BUY INPUTTING THEIR BILLING & MAILING INFORMATION, REVIEWING THEIR TOTAL & FINALIZING THEIR ORDER. DEVICES USED FOR CREDIT CARD PURCHASES CUSTOMER MERCHANT ISSUING BANK ACQUIRING BANK INTERCHANGE STEP TWO <> SOLD THE MERCHANT SITE SENDS THE AUTHORIZATION REQUEST TO THE PAYMENT PROCESSOR. A PAYMENT PROCESSOR IS A COMPANY (OFTEN A THIRD PARTY) APPOINTED BY A MERCHANT TO HANDLE CREDIT CARD TRANSACTIONS FOR MERCHANT ACQUIRING BANKS. DEVICES USED FOR CREDIT CARD PURCHASES CUSTOMER MERCHANT ISSUING BANK ACQUIRING BANK INTERCHANGE STEP THREE > THE PROCESSOR SENDS THE AUTHORIZATION REQUES T TO THE AUTHORIZATION THE ISSUING BANK (OR CREDIT REQUEST INCLUDES: CARD ASSOCIATION). THE CREDIT CARD NUMBER EXPIRATION DATE THE BILLING ADDRESS THE CVV NUMBER THE AMOUNT OF THE ORDER DEVICES USED FOR CREDIT CARD PURCHASES CUSTOMER MERCHANT InI ISSUING BANK ACQUIRING BANK IF APPROVED, THE AMOUNT OF THE ORDER IS RESERVED FROM THE TOTAL OF AVAILABLE CREDIT FOR THE CARDHOLDER. INTERCHANGE STEP FOUR <> THE ISSUING BANK SENDS THE AUTHORIZATION RESPONSE TO THE PROCESSOR. THE AUTHORIZATION RESPONSE CONSISTS OF EITHER: AN APPROVAL ALONG WITH ADDRESS VERIFICATION SYSTEM (AVS) & CARD VERIFICATION VALUE (CVV) RESPONSE CODES OR A DECLINE. DEVICES USED FOR CREDIT CARD PURCHASES CUSTOMER MERCHANT ISSUING BANK ACQUIRING BANK INTERCHANGE STEP FIVE <> THE PROCESSOR ADDS RESPONSE CODES TO THE AUTHORIZATION RESPONSE & PASSES THE AUTHORIZATION BACK TO THE MERCHANT WEBSITE. THE AUTHORIZATION (IF APPROVED) IS STORED ON SECURE SERVERS FOR LATER PROCESSING BY THE MERCHANT. DEVICES USED FOR CREDIT CARD PURCHASES CUSTOMER MERCHANT ISSUING BANK ACQUIRING BANK INTERCHANGE STEP SIX <> THE MERCHANT DELIVERS GOODS OR SERVICES TO THE BUYER. DEVICES USED FOR CREDIT CARD PURCHASES CUSTOMER MERCHANT InI ISSUING BANK ACQUIRING BANK INTERCHANGE STEP SEVEN > THE ISSUING BANK SENDS THE APPROPRIATE FUNDS FOR THE TRANSACTION TO THE CREDIT CARD NETWORK, WHICH PASSES THE FUNDS TO THE MERCHANT'S BANK. THE BANK THEN DEPOSITS THE FUNDS INTO THE MERCHANT'S BANK ACCOUNT. THIS IS CALLED "SETTLEMENT." TYPICALLY THE TRANSACTION FUNDS ARE DEPOSITED INTO THE MERCHANT'S PRIMARY BANK ACCOUNT WITHIN TWO TO FOUR BUSINESS DAYS. DEVICES USED FOR CREDIT CARD PURCHASES CUSTOMER MERCHANT ISSUING BANK ACQUIRING BANK INTERCHANGE SOURCES HTTP://Www.AUTHORIZE.NET/RESOURCES/HOWITWORKSDIAGRAM/ HTTP://HELP.YAHOO.COM/L/US/YAH00/SMALLBUSINESS/STORE/ORDER/ORDER-21.HTML True Merchant Payments made Simple INFO@ TRUEMERCHANT.COM TRUEMERCHANT.COM FACEBOOK.COM/ TRUEMERCHANT YOUTUBE.COM/ You TRUEMERCHANTPAYMENTS TWITTER.COM/ TRUEMERCHANT in LINKEDIN.COM/COMPANY/ TRUE-MERCHANT %24 WEBSITI WEBSITE PROCESSOR PRO CESSOR WEBSITE PROCESSOR WEBSITE PRO CESS OR WEBSITE PROCESSOR MERCHANT MERCHANT MERCHANT MERCHANT MERCHANT MERCHANT %24 %24