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How Credit Card Processing and Payment Integration Work


how credit card processing works

Many people may be confused about how a credit card transaction on the web works. Particularly if you are an ecommerce site or other online vendor, it is important to have a basic understanding of what happens during a credit card transaction and how you can maintain security standards.

Who Is Involved in a Credit Card Transaction?

There a numerous participants involved in one credit card transaction. Typically, these participants include: the merchant, the customer, the payment gateway, the acquiring bank’s processor, the credit card interchange, the customer’s credit card vendor, and the merchant’s acquiring bank. Each of these players will, at some point, have access to order and transaction information. While the number of participants is high, is only takes an average of two to three seconds for each credit card transaction to be approved.

How the Transaction Works

Once an item is purchased, the payment information is sent to a payment gateway. From there it is submitted to a processor, which routes the payment to a credit card interchange. From there, the issuing bank verifies the funds available for the customer, and if it approves the transaction, it sends the information to the merchant’s bank account, where it is deposited. At each stop along the way, the participants charge a small fee—usually from 10 cents to almost two dollars—which ultimately can remove about three dollars from the total order. It is up to the vendor to decide if the customer will incur this cost, or if they will.

Speak to a Clarity representative today about how to safely and smoothly integrate payment solutions into your ecommerce website.

Payment integration solutions in Austin, TX

Credit card transactions can be confusing. However, there are two takeaways: first, each credit card transaction will incur a fee, and it is important to strategize about how to cover this fee. Second, because the information passes to so many parties, it is imperative that the data remain secure and encrypted. Speak to a Clarity representative today about how to safely and smoothly integrate payment solutions into your ecommerce website.


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