Articles

Everything about Credit Card Processing

by michael bedwell Digital Marketer

Credit card processing is the act of electronically transferring funds from a credit card account to a merchant account. This process typically includes four main steps: authorization, capture, settlement, and funding.

Authorization is the first step in credit card processing. During authorization, the credit card issuer approves the transaction and places a hold on the funds in the cardholder's account. This hold ensures that the funds will be available when the transaction is processed.

Capture is the second step in credit card processing. During capture, the funds are transferred from the cardholder's account to the merchant's account. Settlement is the third step in credit card processing. During settlement, the merchant submits all captured transactions to the credit card issuer for payment. Funding is the fourth and final step in credit card processing. Funding occurs when the credit card issuer releases the funds from the hold placed on the account during authorization. The funds are then transferred from the merchant's account to the cardholder's account.

Credit card processing is a complex process, but understanding the four main steps can help simplify it. By understanding the role that each step plays in the process, you can be sure that your transactions are processed correctly and efficiently.

1. Authorization: The first step in credit card processing is authorization. During authorization, the credit card issuer approves the transaction and places a hold on the funds in the cardholder's account. This hold ensures that the funds will be available when the transaction is processed.

2. Capture: The second step in credit card processing is capture. During capture, the funds are transferred from the cardholder's account to the merchant's account.

3. Settlement: The third step in credit card processing is settlement. During settlement, the merchant submits all captured transactions to the credit card issuer for payment.

4. Funding: The fourth and final step in credit card processing is funding. Funding occurs when the credit card issuer releases the funds from the hold placed on the account during authorization. The funds are then transferred from the merchant's account to the cardholder's account.


Sponsor Ads


About michael bedwell Innovator   Digital Marketer

11 connections, 0 recommendations, 95 honor points.
Joined APSense since, January 30th, 2021, From Newark, United States.

Created on Mar 29th 2022 13:27. Viewed 64 times.

Comments

No comment, be the first to comment.
Please sign in before you comment.