[INFOGRAPHIC] How Does Credit Card Processing Work?

Infographic-How Does Credit Card Processing Work-Banner

[INFOGRAPHIC] How Does Credit Card Processing Work?

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Infographic-How Does Credit Card Processing Work?

For businesses, credit card processing is a two-step process. And, while you don’t need to know everything about how the payments industry functions, a basic understanding of those two steps can help you save money by reducing your overall credit card processing expenses. Click to view our infographic for an overview of authorization, settlement, and why they’re both vital to the payment process. For a more in-depth look at this topic, read the full blog post here.

So, why are authorization and settlement so important? Put simply, because different fees are incurred at each stage, and a failure (or partial failure) in either step can result in increased costs and/or funds from credit card transactions not being deposited.

Here’s a summary of how each step works:

1. Authorization. Authorization occurs when you swipe, dip, or key a credit or debit card. From there, the cardholder’s bank then sends an authorization to your processor before the authorization finally is issued by your terminal or software. This all happens in a matter of seconds!

2. Settlement. This step, frequently called “batching out,” is where you submit the day’s transactions to your processor for funding. On the back end, your processor will send the transactions to a sponsor bank, who will deposit funds into your account.

Now that you’ve had an introduction to how credit card processing works, it’s time to ask yourself a few questions. First, are you using the best processing solution for your business? One that allows you to easily follow best practices and reduce your processing rates? Next, does your processor provide in-depth training and excellent customer support? Are they there for you when you have questions?

For more information, read 5 Things to Look for When Choosing a Credit Card Processor for Your Business.

BASYS Processing as a business partner


If your processor doesn’t offer industry-leading solutions and world-class customer support, please call BASYS Processing at (800) 386-0711 or enter some basic information in the form below. Let’s talk about creating a true business partnership that will help you exceed your goals.



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