A credit card is a convenient method of payment to pay for goods in that it saves carrying cash around, which is potentially not safe to do in some parts. More of us have embraced credit cards since the pandemic because many retailers have preferred the method. For those yet to adopt to the payment method because of location perhaps, there are now portable credit card devices available from credit card processors such as Easy Pay Direct. You can find out more about them by visiting https://www.easypaydirect.com/.
So, let’s find out more about credit cards and their processing.
It is interesting to note that the first credit card was only accepted in New York restaurants. We have come a long way since then and credit cards now have worldwide acceptance. It is only really some of the smaller traders that have been slow to embrace them. But then, this has been because of them perhaps operating from remote locations and so not in a position to use a credit machine when they were fixed units that had to be installed inside a shop.
Steps to Processing a Credit Card
The steps to processing credit cards include payment authorization, payment authentication, and clearing.
Authorization can take place inside a store, over the telephone, or online. While inside a store, customers can pay by swiping the magnetic strip of their card on a machine for many transactions. By phone, a virtual terminal provides secure processing. Online, a buyer will input details into a payment form and submit it.
Authentication is the process where the bank will receive the payment request and then will verify whether a cardholder has the balance necessary to make the purchase. Security checks are in place to help determine if it is a genuine transaction or of a fraudulent nature. Where everything is in order the bank account will approve the transaction and communicate the fact to the payment processor. Next, it will be communicated to the terminal or credit card reader.
Clearing involves sending the cardholder and merchant statements. At the close of business each day, a merchant will send a batch of their approved credit and debit card transactions to the processor or acquiring bank. Then it is for the card processing company to forward details of every transaction to corresponding credit card networks. Next, details are forwarded to the card-issuing banks. Funds and transaction fees will, at this point, be moved between banks, the credit card networks, and acquiring processors, to keep the whole system running efficiently.
Portable Credit Card Machines
In the early days, it was only possible to take a credit card payment inside retail premises where a large machine would be installed. These days, credit card processing machines are much smaller and portable. The Easy Pay Direct machine, for instance, is portable enough to accept payments anywhere. This makes it possible for smaller businesses to make use of them. Market traders are embracing the technology when previously it was not possible.
So, the flexibility to take payments anywhere has meant that the credit card has grown from strength to strength as a payment method. The greater protection offered, in terms of goods being covered by insurance with credit cards compared to debit cards, has kept them much in demand. What used to be more useful as a cheque guarantee card is now a card used for payment in its own right.
As consumers, we can go to most places and expect to find that our credit cards will be universally accepted. Preferred even.
In conclusion, there is quite a process to ultimately clearing a credit card transaction, with much of its process in the interest of security and preventing fraudulent transactions from passing through undetected. It is, however, automated, and quick, so no reason not to pay by card.