In this article, we are going to discuss what is credit card processing and its simplified process. Also, we will discuss how the payment transaction is processed from both sides.
What is credit card payment processing?
This is a process that is used for taking credit card payments online by business owners. The company named Stripe has removed some kind of difficult things from the process. When we look from the merchants’ view, we can see that these are very similar to the all-in-one process.
They get well with your bank as well as your shopping site to make payments easy. Due to which the customer can never leave the website until the payment process is over. This is a very easy method, and also you can take various types of payment from this.
With the simplified version of the payment system, there is no need for a merchant account and gateway. This means that the overall cost of the transaction to process is lowered by a lot. Rates are the only competitive factor that is bringing differences in the market. Most of the new processes take less time to set up, and also, the low cost is needed for this.
The experience is straight forward, and you will only have to pay when someone makes a payment. This means that the service provider will take some amount of money from the transaction. This method is also known to take card payments on the go as it is an easy and also very fast method.
One thing is that you will not get the same service that you got in the older version. In the simplified process, there are a lot of new things and also a reduction in extra expenses. If you run into any kind of problem with the payment, you can access the help page of the provider.
How is the payment transaction processed?
As a business owner, one should always look after the comfort and security of their customer. There are two stages to these kinds of payment that is authorization and settlement.
- The customer will go to the website store and then buy something with a credit or debit card.
- Then the information will be scanned by the gateway to keep it safe from the others.
- The payment processor will send the request and the order bill to the issuer’s bank.
- The issuer bank will either approve of the transaction or decline the transaction.
- If the transaction is approved, the payment process will get an intimation from the issuer bank.
The second part of this whole process is called the settlement phase.
- The card issuer will accept the request and transfer the money to the merchant bank.
- Then that money will be transferred by the merchant bank to your bank account for storage.
- The funds will be accessible then after the money is stored in your bank account.
- Many times a bank will let you access your money before it has even dispatched.