WORKING OF ONLINE CREDIT CARD PROCESSING

The online credit card processing involves numerous procedures in order to make a business successful. Thus the merchant’s business gets a boost with increased sales volume and earns optimised profit. But it is necessary to know the proceedings during credit card processing.

When a consumer visits the merchant’s website, he will be able to choose the desired business product or service by clicking on an appropriate link. Then he will be taken to order from the page where he needs to enter the information about his credit or debit card. Using merchant’s shopping cart the software will calculate the shipping fees or taxes. After filling up the necessary information like name, address and phone number along with other details the consumers need to click on Submit Order button, in order to validate their purchase.

Afterwards the accompanying information of credit card will be transferred to merchant’s account bank and then it will go through payment gateway before transaction. At the payment gateway the transaction will be verified for its validity which includes checking credit card number, billing address and CSV code in order to reduce the risk of fraudulent transaction. Suppose if consumer’s card is deemed to be invalid, automatically a response will be sent to merchant’s website so that he can alert the consumer. If the card is deemed valid, then transaction process will continue towards merchant account.

Payment gateway will transfer the necessary fund for transaction from consumer’s credit card account to merchant’s account in bank. Once the money reaches into merchant account it will be held there. If transaction is finished without any issue a response will be sent to merchant’s website notifying the consumer. The message will confirm only that transaction is completed. Some of merchant accounts are integrated well, so that they can send a confirmation through email to consumer and merchant can see a transaction payment message.

Last step in transaction process will be to receive the fund at merchants account. The merchant will be able to receive the fund within few days after transaction. Afterwards the money automatically will be sent to merchant’s account according to signed agreement between service provider and merchant.

Initially the system of credit card processing seems complicated, but each procedure is defined well in order to reduce the risk of fraudulent transaction and enables free flow of cash between consumer and merchant. The consumer won’t be having any knowledge of what is happening; but they will get a transaction message which lets them know whether their card was accepted or not. The merchant might need to collect payment data from merchant account and maintain his own database. This can be accomplished by downloading simple program available on internet; then program the system to import or export the data and merge them.

Online credit card processing plays an important role in online businesses. The effective and reliable online processing system would enhance business productivity, sales, profits and security. In addition it will help in sustaining the niche in competitive market by giving a global presence.