Sunday, November 29, 2015

How Merchant Account Works (part 2 of 2)

The electric request goes to a network.  There is processing network set up  to handle these requests.  This network handles the business of requesting funds from the customers’ bank or credit card  and them letting the merchant know that it is approved.

When the bank has already received the decision about the funds from the managements, it sends approval through the network.  An authorization code is electronically issued and passed through the network until it reaches your computer or the credit card terminal. If there is something wrong, you will be notified that the transaction has been declined. Amazingly, this whole process, thought it seems long, only takes a few seconds.

Customer receipts are issued when they already have the decision about the funds. Approved, the merchant’s terminal will print the receipt, or an electronic receipt will appear online for the customer to print out him or herself, if the transaction is completed via the Internet.

The transaction for the day is then settled and called the batch. This is something else that requires a request made electronically over the processing network. All the authorization codes are checked against the purchases and other transactions. Then the transactions are sent to the credit card companies and to the banks for final settlement before the cardholders' accounts are officially debited.

Batch funds are deposited into your acc ount. After the settlement, the funds will be directed to your account. However, this is a process that takes two or three days.

A good merchant account provider will bring together the elements needed to obtain  merchant status.  This allows the business to efficiently process the payments made by the customer and provide the customer the best customer experience.

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