How Do We Process Credit Card Payments?

We make it simple and efficient for businesses to start accepting credit card payments without the complexity often associated with traditional banking processes. Our experienced account managers guide you through approval, underwriting, account setup, and payment security, helping you get up and running quickly and confidently.

From the initial setup to ongoing support, we’re here to help ensure your payment processing experience is smooth, secure, and reliable.

  • Advanced Payment Technology
  • Fast & Reliable Transaction Processing
  • Accept Payments Wherever You Do Business
  • Competitive & Transparent Pricing
  • Flexible Payment Options
  • 24/7 Merchant Support
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What Is Involved in Credit Card Processing?

Credit card processing is the system that allows businesses to accept payments made with credit and debit cards. It covers the entire transaction journey, beginning when a customer provides their card information and ending when the payment is deposited into the business’s bank account. This applies to transactions made in person, online, or over the phone.

To accept card payments, businesses need a reliable payment processor. Common options include banks, independent sales organizations (ISOs), and merchant service providers (MSPs). Among these, MSPs often provide greater flexibility along with competitive processing rates and fee structures.

No matter what type of business you operate, working with an experienced merchant service provider can simplify and streamline card payment processing. The right provider can offer customized tools and solutions that help your business process payments more efficiently, securely, and reliably.

10 Advantages of Credit Card Processing with Orbits Digital Solutions

Accepting credit and debit card payments can open new opportunities for your business. Whether you operate locally or serve customers around the world, reliable card processing makes it easier to provide convenient payment options while improving the overall customer experience.

Here are some key benefits of choosing Orbits Digital Solutions for your payment processing needs:

  • Seamless Digital Transactionsstro - Process payments quickly and efficiently across digital channels.
  • Easy Payment Trackingstro - Monitor and manage transactions with greater visibility and control.
  • Fraud & Chargeback Protectionstro - Use tools designed to help identify fraudulent activity and reduce chargeback risks.
  • PCI-Compliant Solutionsstro - Support secure payment processing while helping your business meet applicable payment security requirements.
  • Accept Payments Anywherestro - Give your customers the flexibility to pay wherever you do business.
  • Flexible Payment Optionsstro - Offer multiple payment methods to accommodate different customer preferences.
  • Securely Encrypted Transactionsstro - Help protect sensitive payment information through secure transaction technology.
  • Convenient Contactless Paymentsstro - Provide fast and easy tap-to-pay options for a smoother checkout experience.
  • Reach More Customersstro - Expand your ability to serve customers across different markets and sales channels.
  • Greater Customer Confidencestro - Build trust by providing a secure, reliable, and convenient payment experience.
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Simplify Everyday Banking

Make everyday financial management easier with convenient online and mobile banking solutions designed for accessibility, flexibility, and ease of use.

Choose from Flexible Payment Solutions

Accepting credit and debit cards requires a suitable merchant account. With a variety of providers and solutions available, you can choose an option that aligns with your business model, transaction needs, and growth goals.

Secure Credit Card Transactions

Protect your business and customers with modern payment security technologies. From EMV and PCI compliance to encryption and SSL security, our solutions are designed to help safeguard sensitive payment and customer information.

Fraud & Chargeback Protection

Minimize payment-related risks with tools and strategies designed to help detect fraudulent activity and reduce chargebacks. Our payment solutions help you accept card transactions with greater confidence while keeping your business protected.

Common Questions Answered

Want to learn more about how credit card processing works, who is involved in a transaction, or what happens behind the scenes when a payment is made? Below, we answer some of the most common questions to help you better understand the payment process.

Credit card processing may appear simple from the customer’s or cashier’s perspective—a card is tapped, inserted, or swiped, and the transaction is either approved or declined. However, several financial institutions and technology providers work together behind the scenes to complete each transaction securely and efficiently.

Understanding the different participants involved can make the entire process much easier to understand.

Who Is Involved in Credit Card Processing?

Although a card transaction is typically completed within seconds, several key parties work together to authorize, process, and settle the payment.

Your Business — The Merchant

Your business is the merchant in the transaction. You provide products or services to your customers and accept payment in exchange. Whether you operate a retail store, restaurant, online business, or service-based company, you are considered the merchant.

Your Customer — The Cardholder

The cardholder is the customer making the purchase. They use their credit or debit card to pay for your products or services. The cardholder’s financial institution ultimately determines whether the transaction can be authorized.

Your Payment Processor

The payment processor facilitates the secure transfer of transaction information between the merchant, financial institutions, and card networks. Your payment processor plays an important role in routing transactions and helping ensure payments are authorized and processed efficiently.

Your Customer’s Bank — The Card Issuer

The card issuer, also known as the issuing bank, is the financial institution that provides your customer with their credit or debit card. When a transaction is submitted, the issuer reviews the payment request and determines whether to approve or decline it based on factors such as available funds, account status, and security checks.

Your Bank — The Acquiring Bank

The acquiring bank, or acquiring institution, is the financial institution that handles the merchant side of the transaction. It receives the processed funds and ultimately deposits them into your business bank account according to the applicable settlement schedule.

Your Customer’s Card Brand — The Card Network

The card network, also known as the card brand or card association, provides the infrastructure that connects the different parties involved in a card transaction. Major networks include Visa, Mastercard, Discover, and American Express.

These networks help securely route transaction information between the merchant, payment processor, acquiring bank, and card issuer, allowing payments to be authorized and completed efficiently.

Credit card transactions may happen within seconds, but several important steps take place behind the scenes. Here’s a simple overview of how a typical card payment moves from the customer to the business.

Step 1: Customer Initiates the Transaction

The process begins when the customer, or cardholder, chooses to make a purchase. They may tap, insert, or swipe their credit or debit card at the merchant’s location, or enter their card details when making an online or remote purchase.

Step 2: Merchant Collects Payment Information

The merchant receives the customer’s payment information. Depending on the type of transaction, this may happen through a physical POS terminal, online checkout, payment gateway, or virtual terminal.

Step 3: Transaction Information Is Submitted

The merchant sends the transaction details to the payment processor through the appropriate payment technology. This can happen automatically through a POS system or online payment gateway, or manually through a virtual terminal.

Step 4: Transaction Is Verified

The payment network routes the transaction information to the customer’s issuing bank for authorization. The issuer reviews the account and payment details, including available funds or credit. At the same time, security and fraud-prevention checks may be performed to help identify suspicious activity.

Step 5: Transaction Is Approved or Declined

After reviewing the transaction, the issuing bank sends an authorization response back through the payment network and processor. If the transaction meets the necessary requirements, it receives an approved response. If there is an issue, such as insufficient funds or an invalid card, the transaction may be declined.

Step 6: Merchant Closes the Batch

Approved transactions are typically grouped into a batch for settlement. The merchant submits or closes the batch, either manually or automatically, according to the payment processor’s schedule. This process allows the transactions to move from authorization toward final settlement.

Step 7: Funds Are Transferred

Once the batch is submitted for settlement, the payment processor and acquiring bank facilitate the transfer of funds through the payment network. The funds are ultimately deposited into the merchant’s designated business bank account, completing the payment process.

Understanding how credit card processing fees work can help you make informed decisions and choose a payment solution that fits your business. Processing costs can vary based on your industry, transaction volume, business model, and the way customers pay.

Service Charges

Your monthly payment processing statement may include several types of fees:

  • Transaction Fees: These charges apply to individual transactions and typically make up a significant portion of your overall processing costs. They may include authorization fees, per-transaction charges, or percentage-based processing fees.
  • Recurring Fees: These are ongoing charges that are not directly tied to individual transactions. Examples may include statement fees, PCI compliance fees, account maintenance fees, or batch processing fees.
  • One-Time Fees: These charges are generally associated with specific events or services, such as account setup, early termination, chargebacks, or payment retrieval requests.

Common Pricing Structures

Payment processors use different pricing models, and the overall cost can vary depending on factors such as your industry, transaction volume, business risk, and how payments are accepted. Processing rates commonly fall within the 2%–4% range, although actual costs can vary significantly by business.

1. Interchange-Plus Pricing

Interchange-plus pricing provides greater transparency by separating the card network's underlying interchange and assessment fees from the processor's markup. A fixed percentage and/or transaction fee is added on top of the underlying costs.

2. Flat-Rate Pricing

Flat-rate pricing combines processing costs into a single, predictable rate for each transaction. This model is straightforward and commonly offered by popular payment platforms.

3. Tiered Pricing

With tiered pricing, transactions are grouped into different categories or tiers based on how they qualify for processing. Each tier carries its own rate, making the overall cost dependent on the type and qualification of each transaction.

4. Surcharge Programs

With a surcharge program, businesses may pass certain eligible credit card processing costs to customers, where permitted by applicable laws, card-brand rules, and program requirements. This can help reduce the merchant's direct processing expenses while maintaining the ability to accept card payments.

Choosing the Right Pricing Model

No single pricing structure is ideal for every business. While flat-rate providers can offer simplicity and predictable pricing, they may not always provide the most cost-effective option depending on your transaction volume and business profile.

At Orbits Digital Solutions, we can review your current processing activity and business needs to help identify a payment pricing structure that aligns with your transaction patterns and goals.

Businesses can choose from several types of payment terminals and processing solutions to accept credit and debit card transactions. The right option depends on how your business operates and the payment technology supported by your processor.

When selecting a solution, consider:

  • Processor Compatibility: Make sure the equipment or software works with your payment processor.
  • Business Requirements: Consider whether you accept payments in person, online, over the phone, or at multiple locations. You may also need features such as inventory management or customer tracking.
  • Cost & Scalability: Evaluate both the initial investment and long-term costs to ensure your payment solution can grow with your business.

POS Systems

Point-of-Sale (POS) systems are widely used by restaurants, retail stores, and other businesses that process payments in person. While payment processing is an important function, modern POS systems can also provide tools for inventory management, sales tracking, employee management, customer information, and business reporting.

POS systems come in many configurations, so it's important to choose one with the features your business needs today and the flexibility to support future growth.

Virtual Terminals

A virtual terminal allows businesses to process card payments through a secure online interface without requiring a traditional physical terminal. You can access the system from an internet-connected device and manually enter customer card information to process payments.

Virtual terminals can support both one-time and recurring transactions and are particularly useful for mail-order, telephone-order (MOTO), service-based, and remote businesses.

Payment Gateways

A payment gateway securely captures and transmits payment information between an online checkout and the payment processing system. Unlike a virtual terminal, which is generally used to manually enter payment details, a gateway is typically integrated directly into an eCommerce website or online checkout.

Payment gateways can support features such as encrypted transactions, recurring billing, fraud protection, and payment security, helping businesses provide a smooth and secure online checkout experience.

Mobile & Wireless Terminals

Mobile and wireless payment terminals provide businesses with the flexibility to accept payments wherever they operate. Mobile solutions can allow a smartphone or tablet to process transactions through a dedicated app and compatible card reader.

Wireless terminals offer similar functionality to traditional countertop terminals while providing greater portability. They can operate using rechargeable batteries and connect to the internet through Wi-Fi or cellular networks, making them ideal for mobile businesses, restaurants, events, and businesses that need to accept payments away from a fixed checkout counter.

EMV Technology

EMV refers to payment cards equipped with an embedded security chip. EMV chip technology provides an added layer of security compared with traditional magnetic-stripe transactions by generating transaction-specific data during payment.

EMV-compatible terminals allow customers to insert or tap compatible cards and are now a standard component of secure in-person payment processing.

Online Shopping Carts

For businesses selling products or services online, an eCommerce shopping cart provides the customer-facing platform where purchases can be made. Integrated payment processing allows customers to select products, enter their payment information, and complete transactions directly through the website.

Connecting your shopping cart with a reliable payment gateway creates a convenient checkout experience while allowing payments to be processed securely in the background.

Start Accepting Credit Card Payments

Ready to start accepting credit and debit card payments? Apply for a merchant account today and explore payment processing solutions designed around your business needs.

Selecting the right credit card processor is an important decision for any growing business. While processing costs and rates are important, the right provider should also align with your business needs, work with your existing technology, and provide dependable security and support.

Before choosing a provider, consider the following key factors:

Merchant Services

A credit card processor typically serves as your merchant services provider, offering the tools and financial services needed to accept payments. In addition to credit and debit card processing, available services may include ACH payments, eCheck processing, gift card programs, loyalty solutions, and other payment options, depending on your business requirements.

Additional Business Services

Many payment providers offer more than basic transaction processing. Depending on the provider, additional services may include business funding, payroll solutions, inventory management, invoicing and accounting tools, customer loyalty programs, fraud prevention, and other business management solutions.

Choosing a provider with services that complement your business can help reduce the need to manage multiple systems.

Integrations

Integration capabilities are another important consideration. Your payment processor should work smoothly with the platforms and tools you already use, such as your POS system, eCommerce platform, accounting software, shopping cart, or business management tools.

If a provider doesn't offer a specific service you need, ask about available third-party integrations that can help connect your systems.

PCI Compliance

PCI DSS (Payment Card Industry Data Security Standard) establishes security requirements for businesses that accept, process, store, or transmit payment card information. Following these standards helps reduce security risks and protect sensitive customer data.

When evaluating a payment processor, look for a provider that maintains appropriate security standards and can help guide your business through applicable PCI compliance requirements.

Fraud & Risk Protection

Card payments can expose businesses to risks such as fraudulent transactions, disputes, and chargebacks. A payment provider with effective fraud prevention and risk-management tools can help identify suspicious activity, reduce potential losses, and protect your business from unnecessary payment-related costs.

Responsive Customer Support

Reliable customer support is essential when dealing with payment processing. If a transaction issue, technical problem, or account concern arises, you need access to knowledgeable assistance when you need it.

Choose a payment processor that provides responsive, accessible, and dependable support, so you can resolve issues quickly and keep your business running smoothly.

Understanding how credit card processing works and what to look for in a payment provider is essential for making the right decision for your business. By evaluating factors such as pricing, security, payment options, integrations, reliability, and customer support, you can choose a processing partner that aligns with your business needs and long-term goals.

We’re here to help make the process easier. Contact our team today to learn more about our payment processing solutions and discover how Orbits Digital Solutions can support your business.