When a credit card is used for payment, the following process occurs (usually in a matter of seconds!):
After the Sale
Always note the Authorization Code. An Authorization Code indicates that the cardholder has the credit to pay for the purchase. This assures you of payment, as long as:
- A valid card was used by the authorized cardholder.
- The cardholder (not someone else) has signed a sales draft.
- The signature on the sales draft was matched against the signature on the back of the card.
- You have proof that the card was present ( a receipt created by your printer as the result of a magnetic stripe read, or an imprint of the card created by your imprinter). You won’t have this for mail-order, telephone-order, etc., increasing the risk.
- The transaction is not disputed later by the cardholder. (If this happens, you’ll have to fight for your money through the chargeback process.)
Every sale requires both an authorization and a settlement. At the end of each day you will settle your batch of transactions. This means you will transmit the list of transactions through the bankcard network which subsequently serves to begin the funds transfer process between the cardholder’s bank and your merchant bank.
When Are Funds Available? We thought you’d ask. Deposits are transmitted to the merchants bank the business day after the settlement.
Your Merchant Accounts and Your Bank Deposits
Funds are deposited automatically to your bank account. We recommend you always leave a balance in your bank account as a “buffer” to ensure funds are available for monthly transaction fees, chargebacks, etc.
Each day’s Visa/MasterCard/Discover transaction total will appear on your bank statement as a deposit. Since your Visa/MasterCard discount fee is deducted daily, the deposit shown is your net deposit.
American Express deposits are listed separately. Your processing agreements with them controls the payment of your funds.