How Credit Card Processing Works

Orders placed in your store can be paid for with credit card payments that are processed by payment service providers. This is a 3-step process including Authorization, Capture, and Settlement. 

1. Authorization

At this stage, the transaction request has already been sent to your payment service provider. A pre-authorization check with the credit card issuer to verify the credit card's validity. If valid with sufficient funds, the issuer will authorize the transaction, and the funds on the card will be held if the authorization is successful.

No funds are transferred at this stage. If the transaction status is always set to"Authorized", your customer's credit card limit will be deducted, but this won't appear in the billing statement.

2. Capture

Shoplazza sends a "Capture" request to the payment service provider. The payment service provider and the credit card issuer will capture the request for the previously authorized transaction. After the request is approved, the funds will be credited to the account. When a payment is posted, details about this payment will be sent to the acquirer.

Funds will be debited from the customer's credit card at this stage and will appear on their billing statement.

3. Settlement

After carefully reviewing the payment details, the acquirer requests the necessary funds from the company that processes the customer's credit card. The credit card company sends the transaction information to the issuer. The issuer subtracts a small fee from the total transaction amount and returns the remaining amount to the credit card company. The credit card company also subtracts their fee and sends the remaining amount to the acquirer.

Please note that payment methods currently supported by Shoplazza all come from payment service providers. Therefore, when you set up the payment service, the payment service provider e.g. PayPal, will settle payments collected from your customers according to its own rules.

Please look up or get in touch with the payment service provider for details.



Was this article helpful?
1 out of 1 found this helpful



Please sign in to leave a comment.

Live chat