The Ultimate Guide to Credit Card Payment Processing System

Cash flow is the vital spark of businesses. Whether its salaries, investment for the future, or operational expenses, timely payment is all we need. Before technology took over, payment for goods and services was a slow, manual and unpredictable process. Now, this equation has been changed by credit card payment processing systems.

Nowadays, there are millions of businesses who are accepting credit card payments using ecommerce websites, payment pages, invoicing software, accounting software, and CRM tools. Wondering how credit card payment processing system works? To understand the Credit card payment processing system, let’s delve into the key steps required for a successful transaction.

How credit card payment processing system works?

It all begins with the process of authorization. At this step, the cardholder will pay for purchased good or services by showing his/her payment details to the merchant. Since there are so many payment options, cardholders can decide to choose what they find convenient.

Merchant then sends a request for authorization to its payment processing services provider. To do so, merchants can use plenty of options as well from using a point of sale system or credit card terminal, to an ecommerce website gateway. Now this payment processor will send transfers to the card association, ultimately reaches to the bank who issued it.

The issuing bank will decide whether to approve or decline the transaction depending on existing status of cardholder’s account, credit or debit funds availability, and other different factors. The bank will notify the approval status back along the similar fashion to the respective major parties such as card association, merchant bank, and lastly to the merchant.

Next two steps are settlement and funding. Through automated process, merchant will submit these authorized transactions to its payment processor. Then, payment processor will forward these details to suitable card associations who then convey the debits with issuing banks in their system. The issuing bank charges the user’s account for the required amount and submits the assigned funds to merchant bank excluding interchange fees. Lastly, the merchant bank will settle funds into the merchant account.

That’s simply the working of credit card payment processing system. Typically, process of authorization merely takes seconds. When it comes to settlement and funding, both processes are handled overnight instead of taking days. All of this helps business owners to get their money quickly.

Benefits of Using a Payment Processing Services Provider

Being an online store owner, you need some sort of payment processor to get paid. Out of numerous benefits, below are the main advantages of working with payment processing services provider.

The most prominent advantage of using payment processing services provider is that it accepts credit card and debit card payments. Obviously, you can't run a business without this ability. You want to get paid. So, that's a crucial benefit.

Today's customers want number of options to choose from. Payment processing services provider allows retailers to maintain happy customers by allowing them pay the way they wish.

Payment processing services provider enables seamless integration of payments with other business operations. For those who wants to develop business sanity and business efficiency might want to choose a reliable payment processor like Shopify which help store owners to integrate payments with customer relationship management (CRM), billing, accounting, and so on.

Shopify - An Integrated Payment Processor

Shopify has launched a special in-house payment gateway for ecommerce retailers called as – Shopify payments. This payment gateway has been serving users across US, Canada, UK & Australia. If you are already using Shopify as an ecommerce platform, you don’t need to integrate with separate payment processor. Instead, you need very little setup to use Shopify payments. Best part is Shopify doesn’t charge transaction fees to its users. When you use Shopify payments as your main payment gateway, you can still offer other payment options as well. For instance, you can use PayPal in case your customers prefer it.

Does Shopify offer a credit card reader?

Shopify card readers are only available for those store owners who are based in United States, Canada, the United Kingdom, and Ireland.

Why businesses should opt for Mobile credit card reader?

Since most of customers don’t carry cash normally, make sure to invest on a mobile credit card reader to offer on-the-go payments. Or, else it could cost you many sales. The best part of mobile credit card readers is that it can function without the requirement for costly electronic cash registers or merchant services. Also, you can use them anywhere anytime.

However, the question is what are the best mobile credit card readers of 2019? Let’s delve into the nitty-gritty of each product.


Square credit card reader and mobile app (iPhone or Android) are the most well-known and recognizable mobile credit card reader. On top of it, they have so many benefits to offer. It is more suitable for small business owners who want a budget-friendly, user-friendly and quick method to accept payments on the go. They are not only the cheapest but also quite simplest. When it comes to security, it supports an array of high-end security and encryption protection. This way it assures business owners regarding safety of their customer’s highly sensitive data.


Besides being an ecommerce solution, Shopify enables selling to those online retailers who are selling art, jewelry, clothes via their pop-up shops. With Shopify’s online store, robust mobile app, and mobile credit card readers, you can execute your selling business and carry out transactions wherever your customers are.

PayPal Here

Both PayPal Here mobile card reader and mPOS app works great for those businesses who have both a huge online and in-person presence. In case, you need lots of various payment options, it is a more suitable platform.


Customers are more likely to carry credit or debit cards in their wallets rather than cash. They may expect business owners and retailers to have the same technology they own. This is why it is important to invest on a reliable payment processor whether be a mobile credit card reader or Shopify Payment.

Get paid, pay others and flourish your venture.

Read More about POS in Australia:

Here's How Online Payment Processing Really Works

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