Did you ever notice what happens whenever you use your debit card or credit card transactions to pay at the payment terminal?
There is a lot of process behind the credit or debit card processing that you can’t even imagine. And this type of card transactions is being done in billions every day. Thanks to the credit card payment processing solution company like Quadrapay that are taking care of the day to day transactions in a secured and reliable payment system of processing.
For the small business owners that are new in the market are advised to go for with credit card processing companies with no monthly fee solution provided by Quadrapay so that you can save more in profits.
Wondering How Does Credit Card Payment Processing Works? Quadrapay Explains It All!
The whole process of credit card payment processing is divided into four stages, such as:
In this process of authorization, it is verified whether the card issuer has sufficient money in the account to complete that particular transaction without hitting the credit limit.
- The customer gives card details to the merchant account at the payment terminal.
- The payment terminal or virtual terminals forwards the merchant ID, transaction amount and the card details to the acquirer.
- The acquirer forwards the information to the issuing bank of the customer in which they authorize the funds, and the amount needs to be deducted.
- The issuing bank of the customer verifies the transaction for any circumstances of fraud, and after confirming, they release an authorization code to the acquirer.
- The acquirer informs the merchant, and then they provide the requested service to the customer.
After completing the stage of authorization, the merchant records the transaction information, and all these mixes of transactions are termed as a batch.
These batches are being forwarded towards the acquirer.
After receiving batches at the acquirer, these batches are ready, to begin with, the process of clearing. It includes:
- Forwarding the batches towards the network of the card.
- Then card network requests from the customer’s card issuer for the payment of funds.
- The issuer forwards the funds to the acquirer after deducting the transaction fees that vary upon the card network.
This is the concluding stage in which the merchant receives the funds. This stage includes:
- Our acquirer sends a notification to the bank account of the merchant for the settlement of funds after deducting the acquirer’s discount rate from the overall amount of transaction.
- Finally, the funds are being settled, and the customer receives the bill for the transaction.
What About The Verification Protocols Included In The Credit Card Payment Processing?
To reduce the risk of frauds in transactions while credit card payment processing, the merchant usually follows the verification protocols provided by the card network like:
- CVV(Card Verification Value): The CVV is a three to four-digit code that is present in the backside of a credit card. It is being used to ensure that the card is in the customer’s possession.
- AVS (Address Verification Service): A address verification service verifies the address information of the card issuer with the postal zip code, street number. A merchant can deny a transaction if the address information doesn’t matches with the information provided.
- Verification Through Password Protection: Just like a financial portal where a customer is required to provide a password for the confirmation, just like that to process a transaction at the merchant, they need to enter a pin to verify the identity and approve the transaction towards the merchant.
If you get stuck in something or require more information, you can contact us directly at [email protected].