Payment processing in credit cards is a complex and multi-step process that involves various entities, including the card issuer, the merchant, and the payment processor. In order to understand how payment processing works, it’s important to first understand the different roles and responsibilities of each of these entities.
The card issuer is the financial institution that issues credit cards to consumers. This can be a bank, a credit union, or a specialized credit card issuer. When a consumer applies for a credit card, the issuer will conduct a credit check to determine the consumer’s creditworthiness. If the consumer is approved, the issuer will send them a credit card with a unique card number and expiration date.
The merchant is the business that accepts credit card payments from consumers. This can be a brick-and-mortar store, an online retailer, or a service provider. When a consumer makes a purchase using their credit card, the merchant will use a card reader or a virtual terminal to capture the card’s information, including the card number, expiration date, and the card verification value (CVV).
The payment processor is the entity that facilitates the transaction between the card issuer and the merchant. The payment processor acts as a bridge between the two entities, ensuring that the funds are transferred from the card issuer to the merchant in a timely and secure manner. According to the experts at Pixxels, “Payment processors typically charge merchants a small fee for each transaction, which covers the cost of providing the service.”
The payment processor also ensures that all transactions are compliant with industry standards and regulations, such as the Payment Card Industry Data Security Standards (PCI DSS). This includes encrypting sensitive information, such as card numbers and expiration dates, to protect it from fraud and breaches. Payment processors, such as iKhokha, also handle chargebacks, which occur when a consumer disputes a transaction and requests a refund
Let’s get into the payment processing steps:
In summary, payment processing in credit cards is a multi-step process that involves the card issuer, the merchant, and the payment processor. The payment processor plays a crucial role in this process by acting as a bridge between the card issuer and the merchant, facilitating the transfer of funds and ensuring that the transaction is secure and compliant with industry standards.
If you’re someone who loves watching the latest Bollywood hits or Hollywood blockbusters but hates…
Welcome to Aliasshare.shop, where convenience, great deals, and a wide variety of products come together…
In our modern world, vehicles are essential for daily life, whether commuting to work, running…
Minecraft was launched in 2009 and it has since become a landmark within the gaming…
For gamers who crave the thrill of complex tactics and battlefield strategies, war literature is…
As the accountancy industry moves further into the digital era, the competition for clients is…
This website uses cookies.