A Series of Secure Steps in Just a Few Minutes…

The process seems a long one but it doesn't take more than a few minutes. Let's take a look just for a better understanding of credit card processing. The following steps will give you an overview of how a credit card works. Let's have a general idea of how it flows from the merchant to the bank.

It begins with the customer initiating the process by placing an order using the credit card. This induces a merchant to send the transaction details to the merchant's payment gateway. The details include customers name, address, identification information and the amount of purchase. The payment gateway then checks the database to identify the acquiring bank and sends the information to the same bank's payment processor. Afterward, the payment processor identifies the issuing bank by examining customer's credit card number and other information. At the same time, the payment processor sends the customer information and other details to the issuing bank. The issuing bank then analyses the customer account balance to check if the customer has enough funds. While at the same time, it also verifies if the billing address on the order matches the billing address on the credit card file.

If there are enough funds in the account then the bank blocks the mentioned amount and sends the authorization code to the payment processor. In case the bank account is fraudulent, funds are insufficient or the billing address is invalid the issuing back will deny the transaction and send transaction declined message back to the payment processor. The payment processor in turn sends authorization code or denial message to the payment gateway. After that, the payment gateway sends the information to the merchant helping the merchant to close the account accordingly.