Processing of credit card, that is handling of payment transactions for the merchants through electronic system may be termed as merchant services. These activities are related to obtain the information about the sales from the merchant, obtain his or her authority for the transaction, collection of funds from the credit card issuing bank and remittance of the relevant payment to the merchant. Those interested in them must review different merchant services before opting for a particular one.
Authorization of transactions – It is the key responsibility of the merchant to obtain necessary approval from the card issuing bank for authorization of the relevant transaction for processing the sale. This is necessary for protection of the merchant against any fraudulent card. Card holders are also benefited with this authorization as they come to know about the processing of the card for the specific transactions. A terminal is used by the clerk at the sale point for swiping the card for obtaining necessary info that is stored on the magnetic stripe on the reverse of the card. It is exchanged with the merchant bank or the relevant processor that forwards the same to the bank that issued the card. The status of the card holder’s account is the deciding factor for approval or declining of the transaction. The concluded decision is transmitted through the bankcard network association to the sale point terminal. On authorization of the transaction, the print of the sales draft is taken and signed by the customer. Thus the entire process includes obtaining of the requisite info from the merchant, receipt of authorization for the relevant transaction and collection of funds and its remittance to the concerned merchant.
Transaction Chart – The relevant steps associated with the flow of transactions include purchases of goods or services from the merchant. The relevant information is transmitted to the acquiring bank through a standard phone since connected to it. Specially designed IP terminal, i.e. the internet connection could also be the right option. Computer software like the PC charge and a small magnetic stripe reader could also be used for this purpose. The sales authorization request can be submitted through an automated internet website that communicates with the acquiring bank. The next step in this flow of chart related to the transaction is routing of the transaction to the processor and to the associates including Discover, MasterCard or the Visa. They are responsible for routing the transaction to the issuing bank for its approval that is accorded by the latter if the cardholder is approved. The relevant authorization code is transmitted back to the association that in turn sends it to the acquiring bank. This bank sends the approval code or the response to the terminal at the merchant end. It may print a receipt for signatures of the cardholder that requires him or her to pay the approved amount while the bill is paid to the issuing bank.
Knowledge about the above significant aspects related to review different merchant services is quite advantageous to all concerned.