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How Credit Card Transactions Work
By: Jim Conley II, MerchantSeek.com

This is a new section I'm starting. It will appear in every issue
of MerchantNewz from this point on. The purpose is to give
pointers and other important information relating to payment
acceptance.

What better way to kick off this new section than to give a
simple explanation of how credit card transactions work? It's a
rather blurry subject to most new businesses.

Simply put...

When you perform a transaction and receive an authorization
number, the charged amount is immediately wire-transferred
out of the customer's credit card account into your merchant
account. The merchant bank will then deduct the percentage
rate (discount rate) and per transaction fee, and wire-transfer
the balance of the charge into the business checking account
of your choice. The monthly statement fee is deducted the
same way and is sent to you by regular mail for your
accounting and balancing at the end of the month.

The whole process of a transaction from start to finish takes
only a few seconds. There are a bunch of details about how
the transaction goes through different gateways and such, but
basically this sums up the most important points of how credit
card transactions are completed. To view a graphical diagram
of how transactions are completed through a website (using
Real-Time Processing) click here:
http://www.merchantseek.com/guide.htm#transactions

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Jim Conley II is the CEO/Founder of MerchantSeek. MerchantSeek allows merchants from around the world to search FREE for a Merchant Account Provider that best fits their businesses needs and budget. Visit us at http://www.merchantseek.com/