Credit Card Transaction Processing: Step-by-Step

Step-by-Step

There are two main types of credit card payment processing systems. They are merchant account processing and third party credit card transaction processing. The credit card transaction process is different in both systems. Credit card transaction fees are also differ. We’re going to follow credit card transaction processing step-by-step for both types of credit card transaction processing systems.

Merchant account credit card transaction processing is a type of credit card transaction processing where the money is directly processed by the merchant account providing bank.

• Your client enters the necessary information using a secure form on your web site
• This information is encrypted using SSL-encrypted technology
• The encrypted data is passed to the credit card transaction processing gateway
• The data is decrypted using an SSL certificate by the gateway
• The credit card transaction processing gateway verifies the correctness of the information provided
• The information is re-encrypted using SSL technology and passed on to the credit card transaction processing bank
• The bank transfers the money from the clients credit card to your merchant account

Third party credit card transaction processing is another type of credit card transaction processing. Here the money is transferred through a third party credit card transaction processing company to the bank. This is used when it is difficult to acquire a merchant account due to the banks’ hard guidelines and credit card transaction processing policies.

• Your client enters the necessary information using a secure form on your web site
• This information is encrypted using SSL-encryption technology
• The encrypted data is passed to the third party credit card transaction processing company
• The third party credit card transaction processing transfers the data to the banks’ gateway
• The credit card transaction processing gateway verifies the information and passed it to the bank
• The bank transfers the money from the clients credit card to the third merchant credit card transaction processing company
• The third party credit card transaction processing company transfers the money to your third party merchant account
• Payouts are then made by bank transfer, checks, PayPal, etc.

Both credit card transaction processing systems have different charging systems too. Third party credit card transaction processing does not have any monthly (or membership) fees, but a higher credit card transaction fee is usually taken.

It’s up to you which type of credit card transaction processing you chose, which type of processing is available to you, or suitable for your business.

Read other articles

• How To Minimize Online e-Commerce Credit Card Fraud
• Business in the Internet. To Start or Not to Start
• GoEmerchant.com

Read all articles