What A Credit Card Transaction Looks Like

Believe it or not, credit cards go through a sort of life cycle on each and every transaction.  Credit card transactions are used both by retailers and internet transactions as well.  The events and the activities may differ just a bit according to the processing system that is being used, the actual merchant, credit card being used, type of transaction or credit card issuer.


When the card holder makes a purchase, they present their credit card to the merchant.  For internet transactions, the buyer will type in their credit card number, expiration date and three digit code on the back of the card in addition to the billing address.  The merchant then will swipe the card and the acquirer receives the authorization request electronically.


The acquirer will then transmit that authorization request to Interchange where they pass on the request for authorization to the issuer.  At this point, the issuer will either approve the transaction or deny it.


Interchange then sends the authorization answer to the acquirer who then passes the answer along to the merchant.  The merchant completes the transaction accordingly.


When the merchant closes batch, the info is sent to the acquirer via a merchant account.  The acquirer sends the transactions to the interchange for settlement and also credits the amount of the purchase to the merchants account.


Interchange then does their part by sending the transaction info to the issuer and the acquirer and gives both of them info such as how much to credit the merchant and how much to debit the cardholder.


The issuer then posts the transaction to the account of the cardholder.