Credit card processing: Who is involved.

A credit card purchase involves several parties and transactions. The key parties are the cardholder, the merchant, the acquirer, the card association and the issuer. Let’s look at each in more detail:

CARDHOLDER
The cardholder is the owner of the card used to make a purchase. Cardholders may be physically present in a store when they make a purchase, or they may submit credit card information over the phone, by mail or through a website.

MERCHANTS
Merchants are businesses that accept credit card payments for products or services sold to cardholders.

ACQUIRERS
Acquirers establish merchant accounts with businesses so the businesses can accept credit card payments. Sometimes, banks act as acquirers and work with businesses to set up merchant accounts. But more often, merchant service providers like Envelo Bank Card Services acts as the acquirer and oversee all facets of credit card processing.

CARD ASSOCIATIONS
Card associations are the networks, such as VISA® or MasterCard®, that act as gateways between the acquirer and issuer for authorizing and funding transactions.

ISSUERS
The issuer is the financial institution or other organization that issued the credit card to the cardholder.

Credit card processing: How it works.

When a customer makes a purchase using a credit card, it triggers a cascade of activities and transactions. Here’s what happens:

1. Your customer gives you (the merchant) a credit or debit card or card information, via an on-site card swipe, phone or website.
2. The merchant submits the transaction to the acquirer, who sends the information to the customer's card issuer for authorization.
3. The card issuer sends authorization – that the card number and amount are valid – back to the acquirer.
4. Next, the acquirer processes the transaction for the cardholder. This requires that the acquirer send the transaction to the card association, which debits the issuer for payment and credits the acquirer.
5. Once the acquirer has been paid, the merchant receives payment – an amount equal to the transaction amount minus the discount rate, which is the fee the merchant pays the acquirer for processing the transaction.

Fraud Management

Protect your business  & your profits with proactive fraud management.

Credit card fraud is a growing problem, but one you can manage. Fortunately, card-processing equipment contains fraud-protection features, and there are steps you can take to prevent fraud. Envelo Bank Card Services will work with you to make sure your business is compliant with industry standards to prevent credit card fraud. We’ll also introduce you to preventative measures you can take to keep fraud from hurting your business and eroding your profits.