Credit Card Processing: How Does It Work?

Online credit card processing

Though many people shop online and use a credit card, few understand how online credit card processing actually works. While the process may seem complex, it can be broken down into a series of simple steps.

Step 1: Cardholder initiates transaction

The customer submits their credit card details to the merchant to start the process.

Step 2: Data travels through gateway

The merchant submits the credit card data into an online payment gateway via a secure connection. The gateway formats the data and passes it the merchant's bank processor.

Step 3: Data sent to credit card network

The merchant's bank processor submits the details to the credit card network, which routes the transaction to the issuing bank (the bank that issued the customer's credit card).

Step 4: Transaction approved or declined

The issuing bank approves or declines the transaction. The transaction results are shared with the credit card network, then the merchant bank's processor, and finally the payment gateway.

Step 5: Information received

The merchant can approve or decline the transaction in real-time.

Learn more

First Atlantic Commerce is a leading provider of international credit card processing solutions, including payment gateways, merchant account solutions, and anti-fraud protection.

Visit us online at firstatlanticcommerce.com.