How Merchant Payment Processing Works
- Customer offers her credit card to pay for an item.
- Merchant swipes/keys in credit card information and the customer signs the authorization slip.
- Through the processing center and interchange, the transaction is encoded, verified and sent on to the bank for approval
- Once the bank approves the transaction, the issuing credit card company is credited [CF1] with the payment
- The bank simultaneously sends its approval back through processing and interchange
- Processing and interchange send the approval back to the merchant
- A receipt is issued and the transaction is complete