Payment Hub

Guide to Batch Processing for Business

Updated October 14, 2022  |  6 min read

What Is Batch Processing vs Real-Time Processing?

When it comes to credit card processing, there are different ways merchants may conduct their transactions.

As with any good marketing these days, an omnichannel commerce strategy starts with data. Data provides intelligence, and how you apply it is your strategy. That data will reveal the channels you need to focus on and what types of content, messaging, and fulfillment options to produce for each channel.

Batch Processing

Batch payment processing is when data is collected and stored and then processed all at once at a scheduled time. This means collecting all the transactions for an entire day or week and processing them all at once.

Real-Time Processing

Real-time processing, also known as live processing, involves handling and settling each transaction as soon as it is processed. That means the customer's card is charged immediately and the funds are transferred to the merchant's account right away.

How Credit Card Processing Works in a Batch

Here we’ll go over the details of batch processing, including:

  • Why Use Batch Payment Processing?
  • Who Uses Batch Processing?
  • How Does Batch Processing Work?
  • Batch Processing Example

Why Use Batch Payment Processing?

Batch processing is a way for businesses to process transactions in bulk, usually with the same computer and under one application. Groups of captured credit card purchases are pending until they can be settled throughout the day/week.

Once you start a batch process, all these transactions are completed at once in a single process, which reduces workload. This allows for more flexibility when settling multiple batches at once, rather than having a specific time frame per transaction type.

Who Uses Batch Credit Card Processing?

Batch processing is a good option for businesses that charge recurring subscription fees on a weekly or monthly basis.

For example, if your business charges a monthly membership fee, you can create a batch file containing charges for all the members, and then process it in bulk rather than one transaction at a time.

Batch processing can also be a good option for businesses that want to batch together their payments to get discounts from their processor.

However, credit card batch processing can also lead to delays in getting paid, which is why many merchants prefer real-time processing.

using batch processing

How Does Batch Processing Work?

Credit card batch processing can be a complicated procedure for merchants, but an important one. The first step includes authorization of your transaction and checking to make sure there are enough funds on hand from customers when they purchase something online.

The second step involves sending multiple data elements per a customer’s total daily spend across all banks owed by them. This helps you categorize each individual payment rather than just receiving large wads all at once.

Overall, credit card batch processing is the practice of a merchant processing a day’s worth of authorized credit card transactions at the end of the business day or at a time determined by the credit card processor.

Batch Processing Example

Say you’re the manager of a restaurant. You've gotten your dining rooms up and running; business is booming once more, with hundreds of people coming and going each day.

When a customer is ready for the bill, they offer their credit or debit card for payment. The server takes the customer's card, and swipes, taps, or inserts it, then returns it in the folio along with their receipt and a pen to sign with.

Meanwhile, the customer’s payment information is sent to an acquiring bank. If verified as legitimate and having sufficient funds, then it will be noted either via electronic file updates or manually on paper statements received every month from your issuing provider.

Authorization codes are stored in one place until a batch process is completed for all necessary transactions, including those made online and in a physical store. The transaction is not charged to the bank until after the batch process, which occurs when the purchase is authorized on the customer’s credit card at the time of purchase.

After that, you’ll generally process your batch of transactions later in the day. Banks typically charge a fee for each group of credit cards processed, so many merchants choose to only do batch credit card processing once a day to save money.

Real-Time Processing vs Batch Processing

Here are the pros and cons of real-time processing vs batch processing. This section includes:

  • Why Use Real-Time Processing?
  • Advantages of Batch Processing
  • Challenges for Batch Processing
  • Challenges for Real-Time Processing
real time processing vs batch processing

Why Use Real-Time Processing?

For businesses, batch processing and real-time processing can both be effective settlement techniques. Real-time processing includes the authorization, processing, and settlement of transactions all taking place simultaneously once the client pays.

According to, “Merchants must evaluate if faster funding is worth the extra batch and funding costs, with more deposit entries creating reconciliation difficulties in some cases just a few hours sooner than normal next-day funding.”

However, when real-time processing is available, merchants may see new applications that don't charge for each real-time transaction. They may also be charged a higher banking fee for the opportunity.

Advantages of Batch Processing

Batch processing differs from batch settlements in that it only occurs once a day unless additional merchant requirements are necessary. The following are some of the advantages:

  • Automated process – Your team will be more productive if they are not distracted by the payment process.
  • Review transactions – It is simple to find any transaction from a specific batch.
  • Make recurring transactions easier Recurring payment processing is a significant time-saver if you charge clients on a regular basis.
  • Lower security risk – Every day versus multiple times a day reduces the amount of time you spend interacting with your processer, which helps to keep your customer's payment data more secure.
  • Saves you money – Many banks charge a transaction fee whenever merchants process payments. By processing in bulk rather than one at a time, you’ll only be charged for the one batch process rather than for each individual transaction.

Batch payment processing is ideal for merchants with a large number of payments made throughout the day. It's also worth noting that, from the customer's perspective, there isn't much of a difference between batch card processing and a standard transaction, as long as the batch process is done within a reasonable amount of time.

Challenges for Batch Processing

Payments can be delayed or turned down if you forget to batch out at least once within 24 hours. Higher fees and rejections are other common issues that may arise when using credit card processing with batch forms, as it is easy for errors in form submission lineups to get combined together without being noticed until too late.

Challenges for Real-Time Processing

A challenge of real-time payment processing is that it can be more expensive, tedious, and time consuming to process each transaction as it comes in. Unless you have an automated system, you’ll have to process these manually.

Tips for Managing Credit Card Batch Processing Effectively

credit card batch process tips

There are a number of approaches to accepting payments, each with its own set of advantages and drawbacks. The best approach to determine which payment processing method is appropriate for your company is to understand the choices that are available and contact a payment solutions specialist who can help you choose the best option.


Speak with Experts at Clarity

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Autumn Spriggle is a Content Writer at Clarity Ventures who stays up to date on the latest trends in eCommerce, software development, and related topics to provide readers with the latest and greatest. She strives to help people like you realize the full potential for their business.