The use of credit cards to carry out purchases has been standard practice over the years. All we need to do is swipe the card at the vendor’s shop. The time taken for the successful transaction might seem like mere seconds, but there are loads of intricate details involved in the processing of the card. The transaction is complete in the case of the E-commerce transactions of payments, the entering of the card details, and other tertiary elements that enable the successful transaction of the card. This is the same for high-risk offshore merchant processing accounts as well.

According to popular sources, a credit card is a payment card the consumer uses to pay the merchant in exchange for goods and services. It is an unsaid promise between the card-using company and the cardholder to abide by a few drafted financial conditions and terms. The card’s basic function is to deduct the price of the goods or service from the card-issuing company’s money initially. The interest rate is then added to the cost of the goods or service that results in the total amount paid by the consumer when paying the credit card back the owed money.

The Processing of Credit Cards 

The processing of credit cards is a funnel through which the data and information are related to the consumers’ credit cards. The purchases are transmitted from their credit accounts to the merchant accounts. When the consumer uses the credit card to make a purchase, there is a swift transaction between the many financial participants that allows or declines the payments to be processed. The high-risk offshore merchant processing accounts enable and show the same type of treatments as well. The credit card framework works as a blueprint for the guidance of the payments to go in the right direction. When the transaction takes a toll, it acts as an investigator for the business.

The Stakeholders involved in Credit Card processing 

Credit card processing involves the active processing of millions of transactions with the help of a strong and rigid infrastructure of networks and the presence of various stakeholders. These are the key factors that incorporate each network architecture. There are various types of financial institutions involved in the process that results in each task with a mini approval request raised and approved in a particular motion.

• CARDHOLDER

The consumer is the credit card holder who opts for that bank or financial institution’s aid in issuing the card.

• MERCHANT

The merchant is the owner of the selling platform online or the offline store, where the goods are placed for people to buy.

• PAYMENT PROCESSOR

These are the companies that communicate and relay information from the consumer’s credit card to both the Acquiring bank and Issuing bank. This occurs in a very small duration which is nearly lightning speed. The payment processors enable the collection, receiving, and acceptance of the payment while using various software and hardware advancements and developments. The high-risk offshore merchant processing accounts also have a similar behavioral pattern to any other transactions. They are also responsible for protecting the transactions regarding any fraudulent activities and security regarding the same.

• CARD NETWORK

American Express and Discover, along with MasterCard and Visa, are the best examples of various card networks. They have virtually constructed payment infrastructure that facilitates the communication between the issuer bank and the merchant involved in the transaction. One of India’s most well-known card networks is Rupay, launched by NPCI, also known as the National Payment Corporation of India.

• ISSUING BANK

The issuer or an issuing bank is the entity that provides debit and credit cards to the customers. It is the key factor in authenticating a customer’s purchase made at an offline or an online store. When payment happens, the amount of money is transferred to the acquiring bank from the issuing bank, which authenticates the transaction.

• ACQUIRING BANK

The Acquiring Bank is that entity that maintains the bank account belonging to the merchant. With the help of the acquiring bank, the customer can make debit or credit payments using debit or credit cards, especially for high-risk offshore merchant processing accounts, receive payments from transacting customers, and access payment gateways.

What is Payment Gateway?

This technology is responsible for creating a secure connection between the credit card processing company and the business website or browser. This is a secured connection that is used to encrypt credit card information for every transaction. This enabled the verification of the authenticity of a transaction while keeping the sensitive information secure. The initial function is delivering the encrypted information, followed by charging the appropriate amount from the customer’s card. The funds are delivered directly to the business’ bank account while deducting any interchange fees and the cost of processing the payment.

The Authorization Process of Credit Card

The entire authorization process of a credit card can be understood in the following eight steps. They are:

1. A cardholder makes payments to a merchant, which can be possible to be made through a variety of processes. This process includes that the cardholder needs to be present with the card while making the payment.
2. The payment gateway enables the credit card statement to be sent to the merchant’s acquiring bank.
3. The acquiring bank sends the credit card statement to the credit card network.
4. The credit card network sends the statement to the card holder’s issuing bank and requests authorization for the payment.
5. The issuing bank authenticates the statement.
6. The card network sends the approval authorization code to the acquiring bank.
7. The acquiring bank sends the authorization code to the merchants’ payment gateway.
8. The payment is completed.

The credit card processing services regarding high-risk offshore merchant processing accounts are similar to those discussed above. This is a complete guide regarding the selling of credit card processing services. However, this subject to change is the nature of the business is high-risk depending on its operations.