It really is important that business people understand how credit card authorizations are processed. The first thing to learn is where the credit card information goes when you enter it into a credit card terminal or POS (point of sale) system.
When the credit card authorization process is initiated (by a website button, a card swiped through a terminal or some other means) the information is first transmitted to your specified credit card processing form. Next, it is relayed to the card-issuing financial institution through a “bankcard association,” at which point the transaction is approved or declined. In the final step, the bankcard association responds with the approval or decline to the original terminal or POS system.
If a credit card is expired, over its limit, flagged as missing/stolen or otherwise “encumbered,” the credit card authorization process will decline the sale. As additional protection for your business, many banks now want credit card authorizations done on all “paper-based” transactions, too.
Of course, to initiate a credit card authorization in the first place a business must have a merchant account. After the merchant account is established, credit card processing can commence in myriad ways – through the mail, on the phone, over the Internet, through various in-store terminals or via a state-of-the-art wireless device.
Content provided by MerchantWarehouse