Credit card
processor
Credit card processor is
another term used to describe the entity that actually processes
the transaction when an order is conducted. The credit
card processor gathers the information provided (either via
website, phone or retail swipe terminal) and performs a series
of security checks. These checks make sure there is enough
funds available in the cardholder's account, makes sure the
credit card is not reported as lost/stolen, verifies the billing
address the customer provided at the time of the order with the
credit card number provided, checks to confirm the correct
cardholder name and expiration date were given, and can even
verify the correct security code (CVC or CVV) on the back of the
credit card should one have been entered during the ordering
process.
After the information is
processed by the credit card processor, the funds are then
deducted out of the cardholder's account and placed into the
merchant's business checking account. Should the
cardholder request a refund, the processor does the exact
opposite by taking the funds out of the merchant's account and
placing it back into the cardholder's account within a few
business days.
Funds deposited into the
merchant's business checking account is usually 2-3 business
days after the transaction.
If your Internet-based business
uses a recurring billing feature, the funds are automatically
processed and deposited into the merchant's account based on the
duration you have set (weekly or monthly for example).
For more information on
merchant accounts visit our 3-part merchant account guide.
- Back to the
merchant account knowledge base -
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