Credit Card Transaction Process
- Stage 1: Authorization.
- Stage 2: Authentication.
- Stage 3: Clearing & Settlement.
- In the clearing stage, the transaction is posted to both the cardholder’s monthly credit card billing statement and the merchant’s statement.
How does credit card processing fees work?
To connect to the credit card networks to process credit cards, you need a merchant account or credit card processor. Merchant account providers make their money by charging a fee or fees on top of the interchange rate. These fees are negotiable and generally based on your sales volume and type of business.
How are payments processed?
Payment processing. Once the merchant has obtained a merchant account, whenever a customer purchases an item with a credit or debit card, the merchant submits the purchase transaction information to the payment processor used by its acquiring bank via a payment gateway.
What is the role of Visa in the credit card processing?
What is Visa’s Role in Credit Card Processing? Visa provides much of the necessary infrastructure to support financial institutions in issuing and processing debit and credit cards. Financial institutions like Capital One and your local bank issue credit and debit cards because it makes them money.
How do credit cards work?
Credit cards offer you a line of credit that can be used to make purchases, balance transfers and/or cash advances and requiring that you pay back the loan amount in the future. When using a credit card, you will need to make at least the minimum payment every month by the due date on the balance.