Payment Processing Authorization – How does it happen online?

On the Internet - stores as well as transactions are replica of real world stores and transactions. 

 

If you have a low or hrisk merchant account and run an online service or store, it’s a good idea to understand the basics of online payment processing authorization. Here’s how it works:

1.    Customer provides credit card information on your payment page post checkout.

2.    Your merchant account service provider receives the credit card information and forwards it in encrypted form to the concerned Payment Processing Service.

3.    This information is further routed to Payment Processor who in turns forwards it to customer’s Issuing Bank.

4.    Issuing back approves or rejects the transaction requested and the information is passed on via Processor – Payment Processing Service route to a merchant (you).

5.    Merchant can accept/reject the transaction. This is where a high risk merchant can have a security system in place to reject transactions that smell of payment frauds.