Published on January 24th, 2017 | by Guest


How Does Payment Processing Work? [Infographic]

It happens so quickly, you probably don’t even think about it:

  • A customer clicks the BUY button on your e-commerce site.
  • The transaction goes through in mere seconds.
  • You’ve just made a successful online sale.

And it’s not just your site.

This same process happens repeatedly around the globe, generating nearly $2 trillion in online sales every year. By 2020, total e-commerce transactions are expected to exceed $4 trillion.

However, there’s a lot happening behind the scenes — i.e., security and authorization steps that help to eliminate more than 99 percent of all online fraud. Remove any one of the credit card processing steps below, and the world of e-commerce would be very different.

What exactly is happening whenever a customer shops in your online store?

1. Trigger the Transaction

After filling her shopping cart, one of your online customers enters her payment details and clicks the BUY button. A new credit card transaction is now officially triggered.

2. Open the Gates

Your payment gateway instantly and securely sends the customer’s credit card details to your payment processor. This step happens automatically without you needing to manually transfer any data.

3. Ask the Issuer

Your payment processor sends the credit card details to the customer’s bank for verification. This security step is also instantaneous and automatic.

4. Authorize and Advance

Once the payment details are verified, the credit card-issuing bank can either deny or authorize the transaction:

  • If payment is denied, the sales process stops. Notifications are then sent back to you, the payment processor and the customer.
  • If payment is successful, the card-issuing bank deducts the transaction amount from the customer’s account balance.

5. Approve the Move

Your payment processor receives notification that the sale went through successfully, and it passes this info to you.

6. Credit the Account

After a few business days, the money finally arrives in your bank account, and the transaction is now officially over.

Want to See Secure Credit Card Processing in Action?

To continue generating more sales, simply repeat the steps outlined above. Though because the entire process is 100 percent automated, you don’t have to worry about managing these security and authorization steps. Instead, you can focus on attracting more customers and growing your business.

If you’d like to learn more about how online payment processing works (in action), be sure to read the free infographic below.


Author bio: Matt Wollersheim is Vice President of Sales at Performance Card Service, a high-risk merchant account provider.



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