How Retail Credit Card Processing Works

The model below describes how retail credit card processing works in a typical storefront environment.

1. 
   The merchant slides the customer's card through the credit card terminal and enters the sale amount. The terminal then connects to Charge USAs processor for authorization.
2. The processor passes that information onto the bank that issued the credit card where the bank checks to see if the card is valid and see if the charge amount is available on the card.
3. The issuing bank sends back an approval number or a decline message to Charge USAs processor.
4. The information is passed back to the credit card terminal which prints a receipt for the customer to sign if the card is approved. It takes approximately 12-15 seconds to complete steps 1-4 on a credit card machine using a phone line. The newer internet enabled machines can cut this time to just a few seconds.
5. At the end of the day the merchant must "settle" or "batch out" their terminal which will begin the final process of the transaction. In most cases Charge USA can automatically settle the transactions at a specified time each day. Once the settlement process is initiated the funds are transferred from the card issuing bank and are electronically deposits them into the merchant's checking account. It typically takes no more than two business days from the time of the original transaction for the funds to reach the merchant's checking account.

For more information on how retail credit card processing works call us at the number above or request a merchant account online.