![]() The payment processor returns the transaction to the merchant, who can either completed the transaction or request another form of payment if payment is declined. The issuing bank then either approves or declines the transaction depending on whether the cardholder has sufficient funds in the associated account. That information is then sent to the payment processor, which requests authorization from the issuing bank through a card association network. You collect the card data by swiping or inserting the card into a reader or by manually entering the information into an online payment gateway. So here it goes: A customer or client presents you with his or her card for payment. The process repeats itself every time you run a card payment, so it’s a good idea to understand how it works. But, behind the scenes is a rapid fire process that involves all the key players mentioned above. ![]() It takes just a few seconds to process a card for payment, receive authorization, and complete a payment transaction. Usually, these are online forms where businesses manually enter the card information or online shopping carts. Payment Gateways – These are online portals that collect card information and transmits it to an acquiring bank for processing.Issuing Bank: An issuing bank is a financial institution, such as Bank of America, Wells Fargo or Citibank, that offers or “issues” credit cards to consumers.Examples are Visa, Mastercard, Discover and American Express. They establish fees and rules for their networks. Card Associations: These companies operate global networks that process electronic card payments.They also collect the money for each transaction. Payment Processors: Also known as payment merchant account providers, acquiring banks or simply just acquirers, these companies receive authorization requests from merchants and forward them to the card associations and issuing banks for approval so that transaction can be completed.Merchants: Businesses that accept card payments in exchange for goods or services.Here are the major players in the payments process: This will help you understand who ultimately gets the fees, which fees are unavoidable, and how you can negotiate lower rates. The Credit Card Payment Processīefore we do a deep dive into the various fees, it’s important to understand the payments process: who is involved and how payments work. That way, you can avoid unnecessary fees and find potential savings. We’ve created this guide to help you gain a basic knowledge of credit card processing fees, so you can better understand your credit card statement and the fees you are charged. Processing fees are just a fact of life, right? Who has time to worry about something you have to pay anyway? Try to avoid this pitfall of thinking. ![]() ![]() After all, you have a thousand tasks on your to-do list as a business owner. We know it’s tempting to just pay the fees without much thought. They are complicated, confusing, and lead you to question: Why? And yet, they are a necessary part of doing business and accepting credit and debit cards for payments. Processing fees-no one likes paying them. ![]()
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