How Does Your Credit Card Work For Your Payment

08 Jul

Posted by warungdigital as Credit Card

Credit card is one of many instead of money that is used to do run transaction between a buyer to a seller. This Credit Card is very useful as its efficient and effective in usage. It also has the other advantage based on the form it self, it is more simple in usage and we do not need to recount money. Simple way to compare how efficient and effective it in usage is when we want to buy a stuff that have huge price. Let’s say it $1000, of course this is difficult enough to count these amount of money in front of store where we want to buy a stuff. But when we use a credit card we just hand it to the store clerk, sign sales slip, hand back your Credit Card then go home wait for your stuff. You can imagine how simple it is.

But do you know behind the simple of credit card usage there is long route of transaction that run fast. I will explain this credit card work for your payment.

When you buy a stuff to a store you will pay amount of money, let’s say it $1000 and you use credit card that issued by a big bank say it A bank. First process is carried out by clerk when clerk swipes your credit card into an electronic approval machine, type $1000, then an authorization request is sent to bank that handle store credit card.

Then store bank send a request to Visa (an association that built by banks and issues Credit Card to consumer to banks. After Visa receive the request it will sent to bank that issue your credit card( A bank).

A bank noe has two choices, approve or decline your payment. These choices are based on the amount of money still saved in your credit card. Based on your plan to buy a stuff $1000 means these amount should be found in your credit card.

Then the request flow against with the first current. It from A bank then to Visa then to store Bank and the store will receive an electronic authorization and then the clerk will print sales slip it and ask you to sign it.

After you sign it, you can bring your stuff to your home. and there are some transaction that carried out by store and credit card processor, it usually 2% of the stuff price, if you have paid to store $1000 it means that the store has to pay $20 to Credit card processor.

That is the current of transaction as long as your payment for your stuff that bought from a store.

Tags: amount of money, authorization request, banks, Credit Card, credit card usage, credit card work, electronic approval, electronic authorization, store clerk, store credit card, two choices, visa