Credit Card Processing with Features and Details

by Amald 01 business services

Credit card processing is the first step towards helping a potential customer with a card by the bank. The card issuer creates revolving accounts and it grants a line of credit to the cardholders. A credit card is quite different from a charge card as one has to pay the amount back after using it with interest. There is a need to repay the balance in full each month or at least at the end of each statement cycle.

The use of a credit card leads to swipe the card and the transaction gets completed within seconds by Amald. The credit card works on a point-of-sale machine and is swiped to do the purchase or transaction. The details about how does credit card processing works are necessary to know in steps.

Key players detail of credit card:

First of all, the key-players involved in authorization and settlement needs to be known. The cardholder, the merchant (business), the acquiring banks (the business banks), the issuing banks (the cardholder’s banks), and the card associations (Visa and MasterCard) are linked together:

Cardholder: The credit or debit card (as most of us do) is already familiar with the role of the cardholder. A cardholder is someone who also obtains a bankcard (credit or debit) from the card-issuing bank. Then present the card at business to pay for the goods and services.

Merchant: A merchant is any businessman who sells goods or services. The only merchants that accept the cards as a form of payment. A merchant is any business that maintains a merchant account and enables them with accepting credit or debit cards. The payments from the customers or cardholders for the goods or services are provided with a high-risk merchant account.

Acquiring banks: The acquiring banks are registered members of the card associations (Visa and MasterCard). The acquiring bank is often found as a merchant bank as they contract with merchants to create and maintain accounts (called merchant accounts).

Issuing banks: The issuing bank issues with credit cards to the customers. The issuing banks are also found to be members of the card associations. The issuing banks pay the acquiring banks for the purchase that the cardholders make. It is the responsibility of the cardholders for repaying the issuing bank which comes under terms of credit card agreements.

PCI Compliance standards:

PCI compliance is another important aspect of the card industry. The PCI is a short name for Payments Card Industries. The PCI is responsible for strict set o rules which are known as PCI DSS or payments card industry data security standards. It's an industry-wide group of guidelines that are dedicated to preventing fraud.

At times the card payments get declined. There may be several reasons why the card payments get declined. At times the POS machine shows the error code while the merchants determine the reason for the rejection. If the machine does not show any rejection then there is a need to call customer care to find why the payment got declined.

Some of the common reasons for declining of payments are:

Ø Insufficient account balance present on the card.

Ø Insufficient credit limit found on the credit card.

Ø Punching of the incorrect card number or the expiration date

Ø Any technical issues

Ø If the transaction is not found to fall with bank purview

Ø When bank suspects any fraudulent activities

Credit card processors work with different types of credit cards. Here are some of the card types which are known to be present with the card systems:

Ø Consumers Swipe magnetic stripe cards

Ø Dip EMV Chip cards

Ø Tap contactless cards

Ø Digital wallets card

How to evaluate credit card processors:

Credit card processing as complex details:

Credit card processing is a very complex service that involves multiple moving parts. It also works with emerging technologies, payment networks, regulatory bodies along with the financial institutions. The service involves a level of complexity with credit card processors that often vary in quality.

The evaluating of potential credit card processors along with merchant acquirers. Here are the four critical areas where the quality of payment processing comes to the foremost:

Ø Speedy transaction

Ø Uptime record with a strong presence

Ø Transparent and fair rate structure

Ø Access with helpful customer support

Few of the revolutionary steps introduced with credit card processing are:

Introduction of EMV which is a chip-based technology. It is used globally in place of the magnetic strip making it more secure and reliable. There is less chance of fraud with face-to-face, including card-present environments.

There is no more manual processing. All the payment information gets automatically synced from the credit and debit cards that get easily processed. We have available Forex Payment Gateway for Forex brokers also.

The chip-enabled card processes with a reduction in fraudulent transactions and protects the cardholders. The advantages of capturing the payment information are directly sent for the client's record and the merchant who has issued the card.

The credit card fee is another most important aspect which guides the card users. Some of the cards are free from any fee while the others put a heavy transaction amount thus minimizing or maximizing the card and its daily use.

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