How Does Credit Card Processing Work?
There are four steps to the actual credit card transaction process. The first step is where the cardholder hands their card to the merchant, who proceeds to verify that both the credit card number and the amount of the transaction are available and valid. All the merchant is doing here is asking for authorization. After authorization has been granted, the approved transaction is stored in a batch. This batch will be sent out later to the acquirer for payment. Batches are usually sent out at the end of the day. After batches have been approved by the acquiring bank, they debit the cardholder’s account. This money is then given to the merchant, minus a small transaction fee. This fee is for the service of credit card processing.
