How Credit Card Processing Works

What exactly happens when you pay for a purchase using a credit card?

You hand over the card to a cashier and they swipe the card through a machine and you sign on a pad to acknowledge the charge and accept it. That is what the part we are very familiar with. The full process is a bit more involved.

You, the cardholder make a purchase. By swiping the card you are requesting approval fro the charge, your card is verified and your purchase is approved. The service that provides the processes this step is called the acquirer - a third party service that provides the credit card processing to the merchant. The

The seller, merchant store all of their approved credit card transactions in a batch and typically batch the transactions daily. The batch gets submitted for funding to the credit card issuer. The issuer pays the merchant  and they bill the cardholder for the charge.

The complete process typically takes about three days.