How Credit Card Payment Processing Works

A view behind the position of credit card payment processing

A business owner also a consumer as well. You regularly evaluate many products and services needed to keep your business move smoothly. Accepting credit cards enables you to get paid. Choosing a payment partner is one difficult decision. Making a choice that does not require becoming a credit card processing expert. It does not mean that you are poking below the earth. Let us understand first how the credit card payment processing works in New York. We also look at the peoples and their roles within the credit card payment processing.

Credit Card Payment Processing company in New York

Who are the peoples involved in the credit card payment processing?

A cardholder receives a credit card from an issuing bank and uses the card to pay for goods or services. The cardholder is most often a lonely consumer, but it can also be some other organization.A merchant may be any type of business that accepts card payments in return for their goods or services. Merchant bank enables merchants to accept deposits generated through credit card payments. Millions of U.S small business owners are merchants, also the acceptance of credit card will be the backbone of their business.

Payment Processors are companies considered to be a financial switch. The payment processors process the transactions on behalf of merchants and their banks. Issuing banks will issue the credit cards through some card associations. Those associations must be linked with banks. What does credit card processing resemble in movement?

Credit card payment processing splits into three distinct processes:


  • The cardholder provides his or her payment details to the merchant in exchange for goods or services. The rise of online business transactions exploded various methods of payment options. 
  • The merchant passes a request for payment authorization to their payment processor. This request might originate from a credit card terminal or Point of Sale system. 
  • The payment processor submits transaction details to the card providing organization and eventually reaching the issuing bank. 
  • The issuing bank approves or declines the transactions based on the present status of cardholder’s account. The issuing bank will send approval status to the merchant bank as well as to merchant.

Settlement and Funding

  • Merchants forwards scheduled batches of authorized transactions to their payment processor. 
  • The payment processor sends these details to the corresponding card associations. The concerned card associations will communicate the appropriate debts with the issuing banks in their network. 
  • The banks will charge a certain amount in the cardholder’s account also for transactions. 
  • After that, the amount will be transferred to a merchant account by deducting interchange fees. 
  • The merchant bank deposits funds into the merchant account.

Benefits of Accepting Credit Card Payments

  •  Accepting credit card will boost your sales.
  •  It will legitimize your business.
  •  Accepting credit cards will improve cash flow.
  •  It will grab impulse buyers.
  •  Will Make your customer more comfortable.


That’s all about accepting the credit card payment process. The authorization will take a fraction of seconds. Only settlement and funding will take more than a day. So, you can get paid, also pay others and grow your business to the next level.

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