How Payment Processing Works

A Step-by-Step Guide

Retail Merchant Account Payment Processing

1. The merchant slides the customer's card through the credit card terminal and enters the amount. The terminal dials a toll-free number and connects to PPG's processor for authorization. Once the terminal has connected it will send the credit card information and amount of the purchase.
   
   
2. PPG's processor will then pass that information onto the bank that issued the credit card. The issuing bank will then check to see if the card is valid and see if the amount requested is available on the card and set aside the amount of the purchase for the merchant.
   
   
3. The issuing bank will send back an approval number or a decline message to PPG's processor.
   
   
4. The information will be passed back to the credit card terminal which will print a receipt for the customer to sign if the card is approved.
   
   
5. At the end of the day the merchant may manually "settle" their terminal which will begin the final process of the transaction. In most cases PPG can automatically settle the transactions at a specified time each day. Once the settlement process is initiated the funds will be transferred from the card issuing bank and PPG will electronically deposit them into the merchant's checking account. It typically takes two business days from the time of the original transaction for the funds to reach the merchant's checking account.

Mail & Phone Order Merchant Account Payment Processing

1. The customer calls (or mails) in an order to the merchant and gives them their credit card information. The merchant enters it into a credit card terminal or PC software.
   
   
2. The terminal or PC dials a toll-free number and connects to PPG's processor for authorization. In some cases the PC software may be able to use the merchant's Internet connection to connect. Once the terminal or PC has connected it will send the credit card information and amount of the purchase.
   
   
3. PPG's processor will then pass that information on to the bank that issued the credit card. The issuing bank will check to see if the card is valid and see if the amount requested is available on the card and set aside the amount of the purchase for the merchant.
   
   
4. The issuing bank will send an approval number or a decline message back to PPG's processor.
   
   
5. The information will be passed back to the credit card terminal or PC software which will give the merchant the approval number and will allow them to print a receipt for their records.
   
   
6. At the end of the day the merchant may manually "settle" their terminal which will begin the final process of the transaction. In most cases PPG can automatically settle the transactions at a specified time each day. Once the settlement process is initiated the funds will be transferred from the card issuing bank and PPG will electronically deposit them into the merchant's checking account. It typically takes two business days from the time of the original transaction for the funds to reach the merchant's checking account.

Internet Merchant Account Payment Processing

1. The online customer finds the merchant's website and adds products to their shopping cart. When they are ready to check out, they enter their billing information. If the merchant does not have a secure page, the customer can be transferred to a secure payment gateway. If the merchant does have a secure site, then the information will be "passed" to the payment gateway without the customer ever leaving the merchant's site.
   
   
2. Once the billing information has made it to the payment gateway it is then transmitted to PPG's processor.
   
   
3. PPG's processor will then pass the information from the payment gateway onto the bank that issued the credit card, which will verify that the card is valid and that the amount requested is available on the card. The bank will set aside the purchase amount for the merchant, then send back an approval number or a decline message to PPG's processor.
   
   
4. That information will be passed back to the payment gateway.
   
   
5. The payment gateway will pass the approval code back to the merchant's site or if the merchant does not have a secure site give the customer their approval information. At this point the merchant can also choose to have the payment gateway email the customer a payment receipt.
   
   
6. Final payment is secured after this point, and is deposited in the merchant's internet merchant account. It typically takes two business days from the time of the original transaction for the funds to reach the merchant's checking account.