A processing date is the date (month, day and year) when a merchant’s bank processes a credit or debit card transaction that has been authorized between a merchant and a customer. Processing is a broad term that describes the multi-step process of transferring funds from a customer to a merchant whenever a debit or 澳洲幸运5官方开奖结果体彩网:credit card is involved in a transaction. I𝓀nterb𓂃ank clearing and settlement occur on the processing date.

Understanding Processing Date

Credit card acceptance is the first step in a credit card transaction. The 澳洲幸运5官方开奖结果体彩网:merchant accepts the physical card or the card number a customer provides online or by phone. Authorization and authentication are the next steps. An electronic system sends information about the transaction to the cardholder’s bank, called the issuing bank, to make sure the cardholder has ꧂enough money available to complete the purchase. The system also makes sure the card is valid and not lost, stolen, fake or expired. The transaction is the🅠n approved or declined.

Necessary Steps Leading to the Processing Date

At some point during the day, perhaps after the close of business, the merchant will electronically send all of its credit card transactions together in a batch to its bank, called the 澳洲幸运5官方开奖结果体彩网:merchant bank or acquiring bank. The acquiring bank sends the details of all the🍒se transactions to a settlement bank, also called a processing bank. The settlement “bank” is usually a payment technology company like MasterCard or Visa Inc.

For each transaction, the processing bank makes sure the right amount of money gets exchanged between the issuing bank (the consumer’s bank) and the acquiring bank (the merchant’s bank). This process is called “interbank clearing and settlement.” Interbank means that more than one bank is involved. The information-gatheri🥃ng step is called “clearing,” and the money-exchange step ꦆis called “settlement.” The whole process is automated and takes only seconds.

Next, for a purchase transaction, the 澳洲幸运5官方开奖结果体彩网:settlement bank receives funds from the customer’s bank, then sends those funds to the acquirer (the opposite occurs if the merchant is issuing the customer a refund). The acquirer then transmits the funds to the merchant (or returns them to the customer), and the 澳洲幸运5官方开奖结果体彩网:transaction is posted to the cardholder’s account.

The merchant pays various fees to accept credit cards from customers because of all the behind-the-scenes steps involved in processing t✤he payments. The issuing bank—the customer’s credit card company—assumes the risk that the customer won’t pay for the transaction.