Transaction Processing

Published by Josip Povreslo on 29. December, 2022

Payment card transaction processing is the process of accepting, verifying, and processing payments made with payment cards, such as credit cards and debit cards. This process is essential for businesses that accept card payments, as it allows them to securely and efficiently process transactions and receive payments from customers.

The process of payment card transaction processing begins when a customer presents their payment card at a point of sale (POS) terminal, such as at a retail store or online. The POS terminal captures the card information and sends it to the card issuer for verification. If the card is valid and the transaction is approved, the issuer will send a authorization request to the card network, such as Visa or Mastercard.

The card network will then forward the authorization request to the card issuer's bank, which will verify that the cardholder has sufficient funds or credit available to cover the transaction. If the transaction is approved, the card issuer's bank will send an authorization response back through the card network to the POS terminal.

Once the transaction is authorized, the merchant can process the payment and the customer can complete their purchase. The merchant will then submit a batch of transactions to their acquiring bank, which will request payment from the card issuer's bank. The card issuer's bank will transfer the funds to the acquiring bank, and the acquiring bank will credit the merchant's account for the transaction amount.

Payment card transaction processing is an essential part of the modern economy, as it allows businesses to accept card payments from customers and enables consumers to easily make purchases using their payment cards. It is a complex process that involves several parties, including the card issuer, card network, and acquiring bank, but it ensures the security and reliability of card payments for both merchants and consumers.

We at Field39 have decades of experience providing solutions to the problems and obstacles businesses have when it comes to payment card processing. Feel free to give us a shout and we'll be more than happy to hop on a call and discuss your ideas!

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