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Understanding How Card Payment Processing Works

According to the latest results from the Bank for International Settlements, card payments dominate the landscape with more than 10 billion transactions processed in the UK in the last assessment year in 2011. The total value of transactions from non-banking institutions is more than $800 billion. You can also get facts about card payment processing via

services for card processing

With this in mind, and in an ever-evolving environment, the ability to process card payments is critical for businesses of all sizes. If you are a new business owner, before accepting a payment transaction, you should have a basic idea of how the process works so that you can better appreciate the available options.

There are two stages involved in processing card payments. These are authorization, which obtains approval to complete the payment of the transaction, and settlement, which allows the transfer of funds from the merchant's account to the issuing bank. The most important phase for merchants is authorization, as lack of authorization causes the payment process to be cancelled.

The process may seem confusing to customers, but there are other parties and components working behind the scenes to complete card payment processing. When purchasing online, an authorization request is sent to the payment processor. An authorization request is then sent to the card issuer. The information contained in the order includes the card number, expiration date, address associated with the card, CVV number, and the total amount of the order.

The card issuer first confirms the card number and expiration date. The billing address is also checked and the total amount of the order is compared to the available credits or credits. Additional levels of verification may include CVV for cardless transactions.