Credit Card Transactions Processing

It’s time again for our continuing blog series on payment-processing solutions, brought to you by Vision Payment Solutions, a leader in the financial services industry and a provider of credit card transactions processing for some of the most successful merchants in the nation. Today, we’ll be providing an outline of credit card transactions processing, and explaining the basic processes involved, as well as some of the best aspects of accepting electronic payments from your customers. Before doing so, however, let’s talk about the entities involved in credit card transactions processing.

These entities are the cardholder (customer), the card-issuing institution, the merchant, the acquiring bank, and a processor. Additionally, there will be a network for transmitting and receiving sensitive card information, encrypted for the customer’s protection.

Authorization: In the first phase of credit card transactions processing, the customer swipes the card for payment at the merchant’s point-of-sale (POS) terminal. The merchant submits the transaction to the acquiring bank, which then confirms the customer’s card information. This authorization produces an approval code – also a record confirming the transaction took place.

Batching: Batching, the second major step in credit card transactions processing, is the accumulation of a workday’s transactions, resulting in batches to be sent to the acquirer, usually at the end of the workday. Transactions submitted in the batch without authorization beforehand may fall under the merchant’s floor limit. There may also be transactions with no authorization, yet the merchant attempts to override, regardless.

Clearing and Settlement: In this next step of credit card transactions processing , clearing and settlement starts off with the merchant asking the acquirer for a final transfer of the batch, which is typically facilitated via the merchant’s credit card association. This results in the transfer of funds from the customer’s account to the merchant’s account.

Funding: In this last stage of credit card transactions processing, after funds are received by the involved acquirer, they are then moved from the acquirer’s account to the merchant’s, typically after a small deduction from the transaction, often referred to as a discount rate. These are fees a merchant must pay to the acquirer for credit card transactions processing.

If you would like to learn more about credit card transactions processing, or if you would like to sign on with Vision Payment Solutions as your premiere credit card transactions processing service provider, then call us today at the number above, and you’ll be connected with a friendly representative, who can easily arrange the ideal, customized credit card transactions processing plan, tailored to the specific needs of your business. Call now, and start experiencing the many advantages of credit card transactions processing sooner than you thought possible!