The payment processor submits the request to the card association, where it’s transferred to the issuing bank. The merchant will send an authorization request (usually via a payment gateway) to a payment processor. The cardholder presents a card to the merchant when they wish to make a purchase. Now that we’ve outlined the parties involved, here are the steps involved with credit card processing: They serve as a link between the merchant, merchant bank, cardholder, and card network. The payment processor is the third-party service that processes credit and debit card transactions. These enable merchants to accept credit card payments and are separate from a regular business account. The merchant bank is the financial institution that manages merchant accounts. The merchant refers to the business that accepts credit card payments in exchange for its goods and services. Each association has its own regulations to follow. The card association refers to the big credit card names like Visa and Mastercard. The issuing bank can be a bank or any other financial institution that issues the card to the cardholder via a card association. Their credit or debit card is issued by a bank. The cardholder is the consumer who wishes to pay for the transaction. To get started, it’s helpful to define the main players involved in any credit or debit card transaction: Parties involved with credit card processingĪ credit card transaction involves a buyer and seller, but it’s a bit more complicated than that. What are the best online credit card processing companies, and how do they work? We’ll break it down for you below. Yet as you start comparing credit card processing services, you’ll see that there’s a multitude to choose from. If you’re not offering this payment method to your customers, you’ll be missing out on significant sales.
Credit card payments are more popular than ever with the boom in online and mobile shopping.
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