How does credit card processing work?

How Credit Card Processing Works

4 1) Consumers complete their orders at your web store. This is done on a secure web page using the Sophio shopping cart.
3 2) The Sophio Software collects the order information, compiling it into a format that the payment gateway expects. The payment gateway is a company such as Often, the payment gateway will not deal directly with a merchant and uses a middle man. This middle man is referred to as 'merchant service provider'. Sophio Software works with a company named eOnlineData who acts on the behalf of Sophio merchants.
5 3) The Sophio Software transmits the formatted order to the payment gateway. The payment gateway checks that the information it received about the order to be sure it has everything it needs to continue processing the transaction. It does this by connecting to a 'processor'. The processor is a company such as Vital. Vital then contacts the 'issuing bank' of the credit card and then attempts to debit the account for the value of the order.
1 4) The customer's bank validates the card and the account. If everything checks out correctly and the credit card is clear for purchases the credit card company (bank) sends an acknowledgement back to the card processor Vital) that the amount requested can be transferred. If the credit card company (bank) denies the charge it sends a code back to the credit card processor and in turn to the payment gateway indicating what the problem was.
6 5) The payment gateway now tells Sophio Software whether or not the transaction was successful. The credit card processor (Vital) initiates a funds transfer (settlement request) to the merchant account for deposit into the merchant's bank account that it has on record.
2 6) Finally, the money moves from the merchant account into YOUR checking account.

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