Business & Finance Finance

How Does Credit Card Payment Go Through?

You must have tried shopping online plenty of times. When you browse through the internet, you will come across a lot of online stores. Most of these display the latest products and offer attractive discounts. When you select a product and proceed to check out, you will be given payment options. The credit card payment option is the most common mode of payment at the online stores. A majority of the people using online facilities prefer this mode of payment due to a lot of reasons. Have you ever wondered how these card payments go through while shopping at web stores? Well, here is how it works?

Once you are done with the selection of products, you will normally add the product to the shopping cart and then proceed to make the payment. When you select the option of paying using credit card, you will be redirected to a page where you are asked to enter the details. In order to successfully make a credit card payment, you will have to enter the card number, name of the card holder and a few other card details accurately. The name of the card holder should be written exactly as what is displayed on the card. Once you are done with this phase, the payment will be processed according to the order placed and the price of the product. This is called the authorization phase.

When a transaction is authorized, the payment gateway will communicate with the servers of the financial institution that had issued the card in order to verify that the card has enough credit. If there is not enough credit balance in the card, the transaction is rejected. Similarly if any of the information entered does not match with the original details, the transaction will not get authorized. Hence, you need to make sure of the authenticity of the information you enter in order to let the transaction go through smoothly. The credit card payment will go through instantly once the required details are entered correctly.

Once the credit card payment is made and you get a message telling that the transaction was successful, you will receive a receipt. Depending on the web store, you will receive an order conformation number or some other unique code to verify the order. The details might even be sent to your email address if you ask for it.

Now, how will the merchant get the money? Once the transaction gets approved, the funds will leave your account. They will move on to the €hold€ status. The money is placed in this status in order to avoid any problems if the product is not delivered as promised. Once everything goes well, the money is transferred from the €hold€ amount to the recipient's main balance. If there are no discrepancies, the merchant can directly approach the card issuer and claim for the fund. This final phase of credit card payment is called €Settlement€.

This payment method will help to settle disputes in the fastest possible manner and hence it is popular with the people around the globe.
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