Get ahead with just-right payment processing

Payment processing is a technology businesses use to accept electronic payments from customers. It’s essentially a series of steps that take place behind the scenes when a customer electronically authorizes funds to be transferred from their account to the seller’s account.

Here’s how payment processing works for a credit card transaction:

After a customer makes a purchase via credit/debit card, the payment processor sends an authorization request to the acquirer. The acquirer then routes the transaction request through the issuing bank for approval.

From there, the issuer verifies the transaction is valid, whether the cardholder account has sufficient funds and if the merchant’s account is in good standing. If the transaction is denied, the purchase ends here. If the transaction is approved, the merchant receives authorization and the issuer places a hold for the appropriate amount on the customer’s account.

The acquirer collects the funds from the issuer and deposits them in the merchant’s bank account. The acquirer bills the merchant for all interchange fees and related transaction fees or processing fees. Finally, the cardholder pays the issuer for the purchase, including any interest and fees.

While payment processing touches many parts of the payments ecosystem, three key things happen: 1) The payment gets authorized. 2) The card issuer verifies or authenticates the payment is valid and not fraudulent. 3) The funds get transferred to the acquiring bank in the settlement process and finally get put in the merchant’s bank account.

The purpose of payment processing is to move transaction data through the stages of the card authorization network. This transaction process makes paying and getting paid via non-cash payment methods possible.

There’s no doubt about it: If you’re not accepting card payments, you’re missing out on sales. By accepting credit cards, you open your business up to bigger benefits, including increasing sales, delivering the convenience customers crave, expanding your market, improving cash flow and staying competitive.

PCI DSS compliance is the set of security standards all businesses that accept debit card payments or credit card payments must abide by in order to safeguard cardholder data. These standards are set by the Payment Card Industry Security Standards Council (PCI SSC), which is comprised of card networks, including Visa, Mastercard, American Express, Discover and JCB International. If you don’t comply, you could be financially liable for the consequences of a data breach and potentially be banned from accepting card payments.

No matter what provider you choose, you deserve to be treated with fairness, transparency and respect. That’s why we created the Merchant Bill of Rights — to help you tell the difference between a provider that has your best interests at heart and one that’s hiding behind smoke and mirrors. From fees to rate structures and so much more, here’s how to pick a payment processor that honors your rights.