A retail location is one that tends to accept credit card transactions that the cardholder and the card is present. It might be a restaurant, clothing, books, or a services location. At the payment stage your credit card transactions are performed face to face, and you swipe the cardholders credit card with a credit card payment terminal.

A Retail Credit Card Transaction Step by Step.

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Step 1. Swipe the Credit Card.

Since we are dealing with a Retail transaction, we have the card present and available to swipe through a payment terminal.

You have finally closed the sale with a select customer. The total sale has been calculated and you are now ready to swipe the cardholders credit card through the payment terminal. The card swipe reads the data on the card and combines that with data from the cash register, payment terminal, or accounting software. The transaction data is then sent electronically to National Transaction Corporation for authorization.

Step 2. National Transaction sends the data to the Bank that issued the Credit Card.

Any authorization or account balance issues are handled during this stage.

The data is received by National Transaction Corporation and sent to the bank that issues the card. A security check is performed on the account and then available funds are verified to support the total amount of the sale. Upon success an approval code is returned to National Transaction Corporation, otherwise, a decline code is returned.

Step 3. Transaction Receipt.

The results of the security and funding requests are returned to the terminal for presentation or printing.

Your terminal receives the response from National Transaction and a receipt is produced. This contains the transaction amount, approval code, and cardholder information along with a time and date stamp of the sale. If unsuccessful an error code is printed along with further information.

Step 4. Transaction Settlement.

The final step is to "close out" or "Batch out" sales and collect the funds.

Settling transactions can be done on a per transaction, or per day basis. When several transactions are settled at once, this is known as batch processing. The mechanism that transfers funds from the varying card issuers banks to the merchant's bank account is called settlement. Once the settlement has been executed, funds are typically available to the merchant account holder in approximately 48 hours.