The card payment industry is complicated, but you don’t have to go it alone.
UP NEXT: 1.3 Credit Card Processing Fees How Corporate Tools® Can Help Visit our guide on Credit Card Chargebacks to learn more. These reversals or forced refunds are typically called either payment disputes or credit card chargebacks. This is because your customers still have the right to dispute their card purchases, reverse the transactions, and potentially get their money back-in some cases up to 6 months to a year or more after the transaction takes place. However, even settled credit card payments aren’t automatically set in stone. Many merchant service agreements will default to depositing funds to your account days later, which is why it’s important to carefully examine your contract and negotiate 1-day deposits if you can. Unfortunately, that depends on your payment processor. (And, depending on your contract, your payment processor might take their cut right then or once a month.) The payment processor then routes the appropriate funds to the merchant’s acquiring bank, which deposits the money, minus fees, in the merchant’s bank account. But there’s a lot happening in the background that we don’t see. It’s when the cardholder and the merchant interact-in person, by phone, or online-and complete their transaction. This is the stage most of us associate with the credit card payment process. If you would prefer a less abstract approach that uses a simple, real-world example, check out our page on Buying Groceries with a Credit Card. Note: This page describes the credit card payment process in general. These events can be usefully divided into the stages described below. It usually takes just a few seconds for a credit card or debit card payment to go through, but in that short time a huge number of events take place. Credit card processors provide businesses with access to a merchant account through an acquiring bank and otherwise manage the merchant’s end of the credit card payment process.
#Debit credit card processing how to#
That knowledge really begins with learning how to talk the talk, so we’ll define the most important credit card payment key terms below before moving on to a detailed description of the stages involved.Ĭredit card processors or “payment processors” are the companies business’s hire to process their credit card payments. Of course, you can outfit your business to accept credit card payments without detailed knowledge of the credit card payment process, but the more you know, the better chance you’ll have of avoiding the missteps common to businesses accepting credit and debit card payments. Spreading around that risk is the main reason why there are so many players involved, and why credit card processing is generally so complex. If you read our general guide on How Credit Cards Work, you already know that accepting a credit card payment is essentially the same thing as receiving a loan, and that means the card payment industry is a risky business. How Corporate Tools® Can Help Who’s Involved in the Payment Process? Stages in the Credit Card Payment Process Who's Involved in the Credit Card Payment Process?
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