Key Stages of Bank Card Processing

Here are some of the key stages in Bank Card Processing...

• Authorization:
  • Initiation: A customer swipes, inserts, or taps their card at a terminal, or enters details online.
  • Routing: The payment gateway sends encrypted data to the merchant's acquiring bank, which routes it to the card network (Visa, Mastercard, etc.) and then to the customer's issuing bank
    .
  Approval/Denial: The issuing bank verifies funds and fraud risk, sending an approval or decline code back through the network to the merchant.
Settlement and Funding:
• Batching: Merchants typically submit a "batch" of daily authorized transactions to their processor.
• Transfer: The processor sends these transactions to the card network, which transfers funds from the issuing bank to the merchant's account.
• Timing: While debit transactions can be near-instant, credit card settlements usually take 1-3 business days, although some providers offer faster, often paid, options. Source