The model below depicts the procedure for online credit card processing – the utilization of online payment gateways to accept credit cards on websites.
- The online customer finds the merchant's website and adds products to a shopping cart. When they are ready to check out, they enter their billing information.
- If the merchant does not have a secure page, the customer can be transferred to a secure payment gateway. If the merchant does have a secure site, then the information will be "passed" to the payment gateway without the customer ever leaving the merchant's site.
- Once the billing information is tranferred to the payment gateway, it is then transmitted to the processor.
- The processor passes the information from the online payment gateway to the bank that issued the credit card, which verifies that the card is valid and that the amount requested is available on the card.
- The bank sets aside the purchase amount for the merchant and sends back an approval number or a decline message to the processor.
- Within 3-15 seconds, the information in steps 2-6 is passed back to the gateway.
- The gateway passes the approval code back to the merchant's site or, if the merchant does not have a secure site, gives the customer their approval information. At this point, the merchant can also choose to have the payment gateway email the customer a payment receipt.
- Final payment is secured and is deposited into the internet merchant’s account. It typically takes two business days from the time of the original transaction for the funds to reach the merchant's checking account.
For more information on how online credit card processing works, apply online for a merchant account.
