How You Pay For Everything Is Changing Worldwide
Many buyers prefer using credit cards when making purchases because of their convenience and rewards. Accepting credit cards can be an important contribution to the success of many businesses so it’s important for business owners to understand the steps involved in each credit card transaction.
Each credit card transaction will begin at the Point of Sale, or POS. When customers are prompted for payment they will insert or swipe their credit card or enter their card number. They may also have to enter the security code from the back of the card. This process may be similar whether they are shopping online or in a brick-and-mortar store.
Once the credit card information is received at the merchant’s location, it will be quickly submitted electronically for authorization and approval. The credit card processing company will request authorization for the payment by contacting the bank that issued the credit card and provide them with the information about the current transaction.
The issuer of credit must always authorize transactions. The merchant will be alerted if the purchase is declined or approved. Upon acceptance, the issuing bank transfers the funds, which will be deposited into the account of the merchant. The entire process can take up to 48 hours to complete and show up on the customer's bank statement.
Many businesses also accept online payments as part of their credit card processing system. This process is very similar, except that there is no physical terminal to swipe a card in. The details of the transaction are also encrypted for security reasons before the information is transmitted online. The entire world is turning to credit and debit cards to make payments. If your online business or retail store location is not accepting credit cards, your business success is at risk.