A credit card transaction might seem as simple as a swipe, dip, or tap, but it involves multiple steps and players. Payment processing is how businesses complete credit card and debit card transactions. Payment processing services expedite card transactions, and payment gateways securely transmit data so money from a customer’s issuing bank can be transferred to a merchant’s account. All of this happens in seconds. The end result is a customer who successfully makes a purchase without using cash or a check—and a business that completes a sale.
On the surface, a credit card transaction seems simple, but there’s much more to it. When you use a credit or debit card to make a purchase, a series of actions occur electronically to complete the transaction. During a single card transaction, a payment is processed, verified, accepted or declined, and money is transferred. While the entire transaction may only take seconds, the process occurring behind the scenes is complex.
Here’s what happens when you make a purchase. For example, let’s consider what a payment transaction looks like when you place a simple fast food order of a burger, shake, and fries