How does credit card processing work? Payment processing and Merchant services!

Kosta Du, a founder of a fintech startup, showing the whole process of paying by a credit card at a payment terminal in a supermarket. Explaining in details the process of performing a transaction and all steps between banks in detail. merchant services. payment processing. credit card processing for small businesses.

One of the many ways to experience how credit card processing works can be seen in a typical supermarket. Placing your bank card before a POS machine screen, the system can read and authorise it under two seconds. But a lot of processes have actually happened within that time frame. On the entire landscape, the payment processing includes the consumer, merchant, the POS machine, bank card (contactless), the payment system (like AMEX, VISA, or Mastercard), the bank account (for consumer/merchant), the bank issuer, bank acquirer, and merchant account. Each of these characters has a role to play in the common credit card payment processing.
When the bank card is introduced into the machine, the machine connects to the bank acquirer and processes infrastructure which further connects to the payment system. Then the payment system/scheme, say, VISA, now determines which bank used the particular card that the consumer used to pay and gets in touch with the bank issuer. The bank issuer then checks if there is enough money in the consumer’s bank account for the transaction that is being charged. After the payment system confirms the financial capacity and transfers the information to the bank acquirer and the infrastructure reports to the machine that there is sufficient funds.
The payment scheme performs a reconciliation process that accounts for past transactions on a bank account. It determines how much money moves from the bank issuer to acquirer as well as from one’s bank account to the merchant account.

00:00 - Intro.
01:10 - Graphical representation of credit card processing.
01:51 - Analysed explanation of processing.
07:58 - Did you always expect the process to be this elaborate?

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[radnasirhill]

AMEX and Visa are not equal financial entities like you are presenting them and the transactional scheme is incorrect also, in those 2 seconds there is much less happening than it is said in your not really professional in financial matters person. here is a credit to you for trying but you are mixing up details and saying things heard somewhere who knows where. No offence.