BIN check

How Does A Credit Card Transaction Happen?

Credit cards are very popular means of making payments for various kinds of transaction. You can purchase air travel tickets, book accommodation, pay for purchases and other services both online and offline with credit cards. With these plastic cards, the burden and risk involved in carrying cash is eliminated. Many people have it. Unfortunately, a lot of the users of credit cards don’t know how it actually works or what happens when they make payment with their credit card.

Credit card transactions are completed just within seconds but the process undergone is really complicated. When you swipe your credit card via POS or an electronic terminal, the system will read the account information. The transaction cannot go through unless it is authorized issuer of the card. Thus, the system will send a request for authorization to the acquiring bank which will in turn contact the issuer of the card for authorization. The issuer will authorize or reject the order. It will prepare an approval code if the transaction is authorized or a denial code if the transaction is rejected and then send it to the merchant through the same route it receives it. The machine will generate a receipt for the transaction. If it is approved, your signature will be required but if rejected, your order will be denied. The entire process is completed within seconds. The process takes place when credit card is used to make payment online.