Fundamental Merchant Processing Guide To Accept Credit Card Payments

Merchant processing is one of the most important facets of retail business ownership next to mobile supply chains. That is why it is so crucial to learn about this important business process if you plan to enter into the field. Credit card processing is simple once you know how it works. Find out all about the steps involved in merchant processing in this merchant processing guide for those entering into the business sector in any capacity.

Customer Purchase

First, the customer makes a purchase. This is the first step of credit card processing. It initiates the series of events that subsequently take place and ultimately put money in the business owners pocket. At this point, the customer purchases an item from a retailer using a credit card. They swipe or insert their card into a credit card processor in order to begin completing the transaction. Then, the credit card processing process begins and moves along to the next step.

Acquiring Bank

Then, customer payment details are sent to a bank. At this time, they are sent to the acquiring bank in particular. This is done utilizing an internet connection or telephone line. It could also be sent to the acquiring processing company, depending on the given companies involved in the transaction. Regardless, those transaction details are forwarded to the involved acquirer and then proceed through the following merchant processing steps.

Credit Card Company

Next, the acquiring bank forwards that transaction information to the credit card company. Depending on which credit card the shopper uses, the information could be sent to VISA, MasterCard or any other credit institution. All the transaction details, like payment amount, credit card number, time, date, merchant information and more are included. Then, the credit card company can either accept or decline the transaction based on a number of different factors. If the payment goes through, it then moves on to the next step in the merchant processing guide.

Issuing Bank

After the credit company approves the transaction, they then make the request for funds to the issuing bank. The issuer then procures the amount of cash required for the transaction total for the office furniture the customer has purchased. At this stage, the customer gets charged for the transaction by their credit card company and that money is drawn from the issuer bank. The issuing bank then takes part in the final part of the credit card processing steps.


Ultimately, the issuing bank then sends the exact funds requested to cover the transaction total costs to the merchant’s bank. The merchant bank account then deposits these monies into their appropriate business bank account. This is typically taken care of by certified merchant services providers. Thus, the business owners now have access to their sales revenue and the customer has the products they want and need. At the end of the credit card processing steps, everyone is satisfied.

No matter what role you hope to take on in the business sector, whether you are finding a mentor or becoming a business mentor, understanding how merchant payment processing works is crucial. Accepting credit card payments is a must for businesses nowadays if they want to survive. That is what you need to always be aware of what takes place during the merchant payment processing services steps detailed above. Use this post as a merchant processing guide to help you become an informed business professional. This way when it comes time to open your own business, you will be one step ahead of the game.

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