With the click of a mouse, you can “add to shopping cart” and your credit card transactions have begun. Did you ever wonder what happens to ensure you get the products and you are billed appropriately? It is a very slick system whereby credit card transactions are processed through a number of channels and before you know it, the product is at your door. Let’s follow the process.
Once the customer has clicked “checkout”, they fill out a form with delivery instructions and credit card information. Now a few different systems are in place depending on if the merchant has his own server or uses an online authorization company. Let us say they use an online company to process the credit card transactions. The information goes directly to the processors secure web site and an instruction is placed to debit the credit card. E-mail is sent back to the merchant detailing the products purchased and delivery information.
If the merchant has his own server, the merchant can either process the credit card transactions manually or the server may have software in place to send the information to a credit card processor.
After the credit card transactions are authorized and debited, the merchant account is credited within a few days. At this point the merchant account provider will take their commission of about 5% per transaction.
Once the order has been E-mailed to the merchant, they must act immediately by sending the buyer confirmation of their order or a digital invoice. There are software packages the merchant may have to do this for them.
With any credit card transactions, there is always the risk of a charge back. To avoid this the merchant will want to get the product to the customer as soon as possible. Many banks frown heavily on charge backs and may terminate a merchant account if it happens often.
