Credit cards, the plastic payment solution that has become the payment convenience for countless consumers… Can your business accept them? It should. From the a business perspective, credit cards increase sales, opening up payment options to customers who may not have had cash on hand for the purchase.
The revenues generated by credit card use are closely approaching the 200 billion dollar mark, and your business can benefit by climbing on board and offering credit card payment processing.
The information below will give you a thorough understanding on how credit card processing works and what your business should know before you sign with a service provider.
Credit card processing is a cycle… The process can is composed of four steps: authorization, batching, clearing, and funding.
To understand the process better, here are some of the terms and steps involved, what they are and how they work:
Acquirer – a bank, which is often a 3rd party provider, who processes and settles merchant credit card payments. This can be a bank providing your merchant account or a service that provides it to your processing company. The acquirer works with the credit card issuer.
Authorization – is the first step that happens after the credit card is swiped. The purchase and card information are sent to the acquirer who, in turn, sends the same information to the credit card issuer. The credit card issuer then accepts or declines the transaction. If accepted, an authorization code is generated and the purchase transaction is continues to the next step, namely: batching.
Batching – is the review process done by a merchant on all credit card transactions for the business day. The review process involves ensuring all credit card transactions are authorized and signed by the cardholder. After the review process, the merchant sends the information as a batch to the acquirer to receive clearing for payment.
Posts
0 comments