Credit Cards | Understanding Credit Card processing

Accepting credit cards empowers businesses to provide customers with convenient and widely recognized payment methods. This fosters trust and encourages sales. This process is key to understanding how credit card payments are handled. This involves a three-step process: Authorization, Capture, and Settlement, ensuring secure and smooth transactions for your online store. Let's break down each step in detail.

Authorization

• Verification: The transaction request is sent to your payment service provider, who then initiates a pre-authorization check with the credit card issuer. This verifies the card's validity and available funds.
• Authorization hold: The issuer authorizes the transaction if the card is valid and has sufficient funds. The necessary funds are then temporarily held on the card. No funds are transferred at this stage.

Capture

• Capture request: Shoplazza sends a Capture request to the payment service provider, who then communicates with the credit card issuer to capture the previously authorized transaction.
• Funds transfer: Once the request is approved, the funds are transferred to your account. Payment details are then sent to the acquirer.

Settlement

• Settlement process: The acquirer reviews the payment details and requests the funds from the customer's credit card company. The credit card company then sends the transaction information to the issuer.
• Fund distribution: The issuer deducts a small fee and returns the remaining amount to the credit card company. The credit card company also deducts its fee before sending the final amount to the acquirer.
• Payment service providers: Shoplazza utilizes payment service providers for all payment methods. Each provider has its own settlement rules, which determine how payments collected from your customers are settled. For detailed information, please get in touch with your chosen payment service provider directly.

Understanding the credit card processing cycle provides valuable insights into how payments are handled in your online store. This knowledge empowers you to manage your finances better and ensure smooth customer transactions.