Accept Credit Cards

Credit Card Processing- Credit card processing is very important to both retailers and consumers. The ability to accept credit cards and to process credit cards means you can collect money. Credit card processing is pretty easy. Credit card processing!

As a customer, credit card processing is magical: enter a few numbers and you can go on vacation, buy a car, etc. As a web merchant, you probably want a bit more background on the process. This article explains the basics of online credit card processing.

Why Credit Card Processing Is Complex

Because credit card processing involves customer financial data, which if carelessly treated could cause irreparable damage, the credit card processing sequence is somewhat complex. Be assured, however, that whether you use PayPal, Google Checkout or a merchant account for credit card transactions, the process will be made smooth and seamless for you and your customer, as long as you’re careful with set-up and your customer is careful in initiating the transaction.

What the merchant has to do is either make arrangements with PayPal or Google Checkout or an equivalent service often available through your web host or secure a merchant account and payment gateway, either as a joint product or separately. What the customer has to do is secure a credit card, sign it, pay attention to the account limit, and not use it past its expiration date. If all those details are attended to, each transaction should go smoothly.

How Credit Card Processing Works

The credit card process begins when your customer comes to your checkout with merchandise in a real or virtual shopping cart. Either the cashier or the online checkout service computes tax, shipping, handling, and any other charges. The customer then presents a credit card for the transaction. Either through a Point of Sale terminal or a payment gateway in an online situation, you submit the transaction on behalf of your customer. The transaction includes the customer’s credit card number, the amount of the requested transaction, and your identifying information.

In the next three seconds or so, quite a lot happens. From the payment gateway, the payment request is securely passed through to the bank at which you have your credit card merchant account. Your merchant account bank submits the transaction to a credit card management group called the Credit Card Network, and this group passes the transaction request on to the bank or financial institution through which your customer’s credit card was issued. The customer’s credit card-issuing bank approves or denies the transaction. As indicated earlier, an outdated card or exceeded credit limit are two possible reasons for a denial. The suspicion that the card is not being used by the real cardholder is another reason that a credit card transaction request may be denied. Such might be the case if the purchase seems to be out of character for the customer.

The approval or denial from the customer’s credit card issuing bank is returned to the Credit Card Network. It is then relayed to the bank at which you have your merchant account, and from there it is returned to the payment gateway. The results are then stored, as well as passed to you and your customer.

As your customer is chuckling over the good deal he or she got and printing the receipt and as your system is sending out a confirming email, the rest of the transaction process which includes two more important steps is underway. The first part is the settlement process. This means that the customer’s credit card-issuing bank forwards the funds required by the transaction to the Credit Card Network, which passes them to your bank account (this need not be the same bank which holds your merchant account). The funds generally arrive in two to four business days. The other step is repayment. This is initiated when the customer’s credit card issuing bank adds the charge to the customer’s statement. Depending on the closing date, the charge could be presented to the customer fairly soon or it could be nearly a month before the statement including the charge is sent to the customer, after which of course the customer has some time in which to pay the charges, reimbursing the credit card issuing bank for the transaction.

Merchant W.H.

Charge.com

MerchantExpress