Everyday there’re millions of payments around the world made by card or its alternative methods. Making a payment takes a few seconds, but have you ever wondered what happens in those few seconds? Let’s have a closer look at what happens behind the point of sale!
Payment processing in details
Every card processing consists of several steps. Even though it takes only milliseconds, there’s a lot of going on.
Initiation: When a customer decides to make a purchase the payment process starts with the customer providing the payment information, such as credit card details, bank account numbers, or digital wallets.
Authorization: The customer’s payment method is authenticated to ensure its validation and that there is a sufficient amount of funds for the transaction. This step involves security checks to help prevent fraudulent transactions.
Capture: Once authorized, the payment amount is deducted from the customer’s account or credit limit. This is the actual transfer of funds from the customer to the merchant.
Processing: The payment information is sent through a secure payment gateway, which acts like a bridge between the customer, the merchant, and the financial institutions involved. The gateway encrypts and routes the transaction data for further payment processing.
Clearing: The payment details are verified by the payment processor to ensure they are accurate and legitimate. If there are any discrepancies or issues, they are addressed at this point.
Settlement: After clearing, the funds are transferred from the customer’s account to the payment acquirer and then merchant’s bank account.
Notification: Both the customer and the merchant receive confirmation of the successful payment, often through email or a receipt generated by the payment processor.
Card processing only takes a few seconds!
There are lot of steps happening during the payment transaction, but this process usually takes a few seconds. An efficient payment gateway ensures that every transaction is processed quickly and securely, without any disruptions. A payment gateway is necessary for every business to ensure the secure transfer of sensitive data, as it aids in fraud prevention and extends global reach. Because of the innovative technologies today payment acceptance has been made easier, safer and quicker!
