From the time a business accepts a consumer payment to the time the business is paid, the process entails a number of steps. For this example, we will follow a credit card transaction.
1. Cardholder makes a purchase and the business records the card information, either by swiping it in a Point-of-Sale (POS) terminal, using a card imprinter, virtual terminal or by manual entry. The information is transmitted to a payment processor.
2. In order to send that transaction from the merchant’s POS to the issuer for approval and then later for posting to the cardholder’s account, the payment processor usually enlists the help of an authorization vendor.
3. The payment processor sends the transaction to a card brand.
4. The card brand submits the transaction to the credit card issuer.
5. The credit card issuer pays the card brand.
6. The card brand pays the payment processor.
7. The payment processor pays the merchant.
8. The card issuer sends the billed amount to the cardholder on their monthly statement. The issuer is paid when the cardholder pays their bill.