How does credit card processing work

Whether you are a business owner who is new to payments gateways or just need a refresher, you are in the right place. So read on…

Understanding how credit cards work is imperative most especially if catering to customers who choose the cashless alternative for payments is part of your business goal. It pays to know even the basics of how the credit card processing La Jolla works.

So here we go… Below is how credit card processing works (in general):

1. Cardholder requests a purchase (cardholder – merchant interaction)

This happens when a cardholder (customer) go to a store or business establishment to request a purchase of product or service using a credit card.

2. Submission of request (merchant – acquirer interaction)

The purchase request by customer is sent by the merchant to the acquirer (also known as merchant acquiring bank), which is the financial institution or the merchant bank that will authorize a credit card purchase.

3. Request to authorize transaction (acquirer-Issuer interaction)

Authorization request is then sent by the acquirer to the issuer, which pertains to the financial institution that provides card association (card association brands include Visa, MasterCard, American Express, and Discover, among others).

4. Granting authorization (acquirer-Issuer interaction)

If there is valid credit available, an authorization code that signals for approval is then sent to the acquirer.

5. Authorizing transaction (acquirer-merchant interaction)

Once the green signal is received from the issuer (through the authorization code), the acquirer then authorizes the merchant to proceed with the purchase transaction.

6. Product/service received by the cardholder/customer (customer-merchant Interaction)

Once the authorization is received from the acquirer, the merchant then finally approve the purchase; the cardholder/customer now receives the product or service.

Choosing a reputable credit card processing system

Putting up your own business? It is imperative that you get a reputable credit card processing La Jolla. This will ensure that you have a payment gateway that runs smoothly and secure. A payment processing system that will not only cater to ‘cash’ customers but those who prefer ‘cashless’ (particularly credit card) payment options as well.

Want to learn more about credit card processing La Jolla? Visit