FAQ: How Do Merchant Accounts Work

Once you understand what a merchant account is, you may still be curious about how the process of accepting credit cards actually works. Here is an outline of the steps involved:

1) The customer places an order and wishes to play with their credit card. This process could occur in person using a terminal, online through your shopping cart software or over the phone.

2) An authorization request is sent to the card issuer by the software, gateway or terminal that was used. All details will be encrypted for safety.

3) The issuer checks all the details are correct and that sufficient funds are available, then responds with either authorized or deadlined.

4) Assuming the transaction was approved, the customer's order can be completed.

5) The merchant sends a settlement request asking for the appropriate funds.

6) Money is then deposited in the appropriate merchant account.