We accept payment via credit card .A credit card is convenient for making purchases. It is much safer to carry around than cash. It is also the best way to create a credit history, which is necessary to make large purchases like a home. Often you need a credit card to rent a car or purchase things on the phone or online. Credit cards can help you track your spending.
Credit card processing system
To understand how confusing this all can be you first have to look at how many different participants is part of the credit card processing system.
◆The merchant.
◆The customer.
◆The gateway for payments.
◆The processor for the acquiring bank.
◆The interchange.
◆The issuer for the customers’ credit card.
◆The acquiring bank for the merchant.
There are seven different key players in a transaction, but amazingly enough it only takes about 2 to 3 seconds for a purchase to be approved.
Once you hit the page button for a purchase you will have to start paying money for it. To purchase an item, you will lose approximately a little money in fees. These fees are spread out among the different participants as the purchase is sent for approval.
The purchase first goes through the payment gateway which then gets routed to the processor. After that, it will get sent to the credit card interchange. After clearing this area the purchase details will be sent to the issuing bank to verify whether or not there is enough available money in the credit card account. Whether you are declined or approved, the details head back to the customer. If approval has been made the authorization results are sent to your merchant account at the bank that is acquiring, then the details are finally sent to the merchant’s bank account where the deposit is made.
It is incredible to think that the credit card processing system can be so complex and yet so fast. It really shows how far we have come along in technology in such a short time.
