Online credit card processing involves the consumer, merchant, credit card issuer, and payment processing company. Personal information is verified for security, and the transaction can take up to three days to complete. The processing company deducts a fee and sends the remaining balance to the merchant.
By following routine procedures, online credit card processing can secure payments for goods or services made by credit card. Online credit card processing typically begins at the time of a consumer’s purchase. Once the consumer authorizes a credit card payment on the website, a credit card processing company typically verifies the information with a credit card issuer to secure the payment. Upon approval, the credit card company can deduct the processing fee and forward the remaining balance to the merchant.
The infrastructure for online credit card processing typically requires a sophisticated system that can efficiently and securely process online transactions in real time. Each part of the system transmits information over a secure computing network in an effort to prevent fraud or theft. This intricate system typically has checks and balances to prevent unauthorized transactions by hackers.
Typically, online credit card processing involves five separate entities to complete the online transaction. The consumer, the merchant, the credit card issuer and the company that processes online payments have an active role in the transaction. A credit card transaction may take up to three days to complete from the credit card authorization to the merchant receiving payment.
When a consumer makes an online purchase, most merchant sites ask for personal information to verify the consumer’s identity. The personal information provided is generally knowledge that only the consumer named on the credit card can provide. Along with your credit card number and expiration date, most sites also ask for a three-digit security code which is usually found on the back of your card. For online credit card processing, the consumer enters this information, plus the billing address that receives the statements.
Setting up the online processing system captures your personal information for transmission to your credit card issuer for verification. The credit card issuer compares the personal information provided by the consumer with the information on file. If the credit card issuer confirms the consumer’s identity, the transaction process continues.
In general, the configuration of the processing network can reject transactions. A transaction is typically declined if the personal information provided by the consumer conflicts with the credit card issuer’s database. Your credit card issuer may also decline the transaction if there are insufficient funds available to cover the purchase.
The processing company guarantees payment once the credit card issuer verifies the identity of the purchaser and cleared funds. Normally, the credit card company will charge the purchase amount from the available balance on the credit card. After deducting the processing fee, the company sends the remaining balance to the merchant, usually through a business checking account.
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