Processing Systems

Processing Systems

The credit card processing system has many steps. Outlined below is a brief description of how a typical credit processing system works.

  1. The e-commerce transaction is submitted to a gateway such as COCARD. The transaction can usually be either only authorized or authorized and captured at once.
  2. If the transaction was only authorized, the merchant must capture the transaction (i.e. flag it for settlement).
  3. The gateway (i.e. COCARD) will settle all captured transactions, refunds, and voice authorizations at the end of the day by securely routing them to a payment processor.
  4. The payment processor continues to route the transaction to the issuing bank (purchaser's bank) to request the funds.
  5. The issuing bank approves transfer of money to the acquiring bank which in turn credits the merchant's bank account.

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