What is Credit Card Processing?

Credit card processing is the technology and infrastructure that enables businesses to accept payments made with credit cards. It involves several parties, including the customer, the merchant, the acquiring bank, the issuing bank, and the payment processor. When a customer uses a credit card to make a purchase, the payment information is transmitted to the payment processor, which then routes it to the customer's issuing bank for authorization. If approved, funds are transferred from the customer's bank account to the merchant's account (minus any processing fees). It is commonly used for in-store purchases, online transactions, and recurring payments.