The procedure followed during online payment processing
The procedure followed during online payment processing
Online credit card payment is something which we are increasingly getting used to in our busy life style. Whether it is the favorite movie DVD that we want to buy or the greeting card and a bouquet of flowers that we want to surprise someone special with, anything is possible through the process of online credit card payments. Hence, the need of the hour is to be aware of how this payment processing actually works for a better knowledge and also for safety concerns. In short, the mechanism or the whole process that is involved from clicking that "Buy" button on the web button and getting the thing "delivered" at your doorstep.
Online payment processing can be studied under two heads. They are authorization and settlement. The prospective buyer first goes to the website of the seller and checks out what all products are in offer along with their prices. Once he decides to buy the product of his choice, all he needs to do is click on the "Buy" button. As soon as the buyer does that, an authorization request is automatically sent to the payment processor for payment processing, which again forwards it to the issuing bank or the bank associated to the credit card. In this request, all the details pertaining to the credit card are sent. These details include the credit card number, expiry date of the credit card, the billing address (for Address Verification Service), the CVV number (or the Card Verification Value, a three digit code printed in the signature panel at the back of the credit card) and the total price of all the products or services that the buyer has chosen to buy.
The issuing bank or the bank associated to the credit card then instantly cross-checks the information it has just received through the payment processing procedure. It validates the credit card number and expiration, checks the amount of the order against the available credit, check the billing address provided against the billing address on file and validates the Card Verification Value number (if it is provided).
If the above set of information is validated and approved by the credit card issuing bank, it sends the authorization response to the payment processor. This authorization response in payment processing includes an approval to the transaction between the buyer and the seller along with the address verification and the Card Verification Value response codes or a decline or disapproval to the whole transaction.
The payment processor, which plays the mediator role throughout the online processing in case of debit or credit card payments, then adds some codes to the authorization response and passes it on to the seller's website the website on which the buyer placed his order.
Therefore, depending upon the state of authorization, the buyer or the cardholder receives either a denial or a confirmation of the order. If declined, the buyer is informed along with a message which asks him to try a different mode of payment. Unlike this, when the authorization is approved the issuing bank, the buyer is taken to the order confirmation page.
After this, all that remains is the shipping of the product from the seller to the buyer's residential address, thereby completing the whole transaction.
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