According to find.co.uk,credit cards form the base of many
businesses theses days. It has been proved by researchers that
people trend to do spend more if business holder is providing
facility of credit cards acceptance.
There are five parties to a credit card processing transaction:
1) The cardholder 2) The issuing bank that issues the card and
advances the line of credit 3) The merchant the retailer. 4) The
acquiring bank that handles the merchants receipts 5) The
network (e.g. Visa or MasterCard) which is a co-operative
venture between the affiliated card issuers and which links the
issuing and acquiring banks and co-ordinates the exchange of
information and the flow of funds.
The cardholder's card is swiped through the merchant's point of
sale terminal or any other credit card processing solution,
which transmits information stored on a magnetic strip or a chip
to the acquiring bank in encrypted form. The acquirer checks the
merchant's ID, the card number, the expiry date, the credit
limit and the remaining credit. The acquiring bank connects to
the issuing bank via the network's computer. The issuing bank
transmits the account information and later transfers the funds
to the acquiring bank. The issuing bank debits the cardholder's
account and reduces the balance of credit available. The network
charges the issuing banks to cover its costs. The acquiring
banks charge the merchants a percentage of each transaction and
pay interchange fees to the issuing banks. The issuing banks
charge cardholders interest on unpaid balances, and sometimes an
annual fee.
About the author:
For more information on
credit card
processing,please visit
http://www.paynetsystems.com<
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