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Electronic credit card processing
![*]() It's not difficult to understand
how real-time, electronic credit card processing works. A
purchaser places order. Next, Merchant securely transfers
order information to service provider over the Internet via
using a secure, encrypted messaging protocol (SCMP).
The electronic credit card processing receives order information
and performs requested services. The service provider formats
the transaction detail appropriately and securely routes the
transaction authorization request through its payment gateway
to the processor. The transaction is then routed to the issuing
bank (purchaser's bank) to request transaction authorization.
The transaction is authorized or declined by the issuing bank
or card. The service provider returns the message to the merchant.
Issuing bank approves transfer of money to acquiring bank.
The acquiring bank, in turn, credits the merchant's account.
There are four different steps for getting through the stages
of your money initiating, authorizing, completing the transaction
and receiving your funds. Initiating the transaction to verify
that a card is active and within the approved spending limit
is the first step. Internet environment-Customer provides
your Web site with card identifiers (i.e., card is not present).
Real-time authorizing, which reduces chargebacks and catches
card-entry errors is the next step. Credit card number is
entered. Terminal or software transmits the credit card number
and expiration date and sales total to your service provider
who transmits data to customer's credit card-issuing bank.
Customer's issuing bank approves or declines the transaction.
This leads us to the next stage of completing the transaction
as merchant's terminal or software transmits transaction details
to your service provider in a batch at close of the business
day which is forwarded to each credit card company, which
redirects the transactions to appropriate banks. Bank debits
credit cardholder's account and credits the service provider.
Thus, you are ready to receive your funds as the service provider
credits your merchant account. All this happens within two
business days.
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