The Credit Card Payment Process

By far one of the most common ways for payments to be made (both online, and in stores) is with credit and debit cards. For consumers using cards provides a simple and hassle free way to make purchases; they don't need to consider how much cash they might need before they go out, and they avoid carrying a comparatively bulky chequebook and pen around with them. For businesses credit cards can also prove beneficial, they have less cash to deal with which can save time cashing up and the funds will automatically be paid into their account without need to take the cash to a bank. The credit card purchasing process can be split into 4 simple steps.





1) After totalling a customer's transaction their card number will need to be entered. If the transaction is taking place in person this is achieved by simply swiping their card through a specific credit card reading machine. If the order has been carried out at a distance (over the internet, phone or via mail) the number will need to be entered manually.




2) The second step is the verification that the card is being used by its rightful owner. Nowadays, and when the transaction is being conducted in person, the most common way of achieving this is to have the customer enter their personal identification number, or PIN, using a keypad. Under some circumstances customers cards are not yet equipped for chip and PIN transactions, when this is the case a signature is used for identification instead.




3) After the card details have been input and the identity of the customer has been verified the payment terminal connects to your bank. From here your bank will contact the bank of the customer to undertake further checks. At this point it will first ensure that the card being used has not been flagged as lost or stolen; it will also ensure that the customer has sufficient funds in their bank account to be able to pay for the product or service. Providing that all of these criteria are met the card will be approved and the transaction authorised.




4) For the customer and the store owner the transaction is now complete. Behind the scenes the bank continues to process the transaction; ensuring that the money is removed from the account of the customer and credited to your bank account. The majority of banks will charge a transaction fee for their services and the remaining balance will arrive in your bank account within three or four days.





Often companies will want to accept payments from multiple companies, in a variety of currencies. In this situation it can become a lot of hassle trying to deal with multiple banks. One solution to this is to employ a payment service provider that is able to streamline the process for you. Many even provide payment gateways if you wish to take your business online.