What is the process of accepting payments online?

Credit cards in a row falling - credit card debt concept
Credit cards in a row falling – credit card debt concept

Written by Charge.com Payment Solutions, Inc.

The typical credit card transaction online takes a few seconds, although for the customers it can look like it takes about fifteen. This is still amazing considering what happens in the background to make this a reality. From the point that the customer clicks to complete the transaction to the point where the confirmation dialog appears, there is a complicated set of communication that goes on between the various financial institutions. Here is a step-by-step process:

Step one – the customer enters the credit card information on the online store and hits the button to complete the checkout.

Step two – that information, which includes the transaction amount is encrypted and sent through the payment gateway to the credit card processing services.

Step three –the credit card processor forwards that the credit card network. VISA and Mastercard are such networks.

Step four – the card network then contacts the customer’s bank. This is to ensure that the customer has sufficient funds for the transaction. This is the point where a decline message comes through if there are insufficient funds.

Step five – the bank then responds with an approve or decline message to the credit processing company which then sends the information to the website.

Step six – with that confirmation the order can either be completed or declined depending on the response from the bank.

Step seven – the customer’s bank then forwards the funds for the transaction to the credit card network (VISA etc). That is then sent to your bank and the funds are deposited into your account.

It is amazing that all of this happens within seconds, along with the level of security you would expect from financial transactions.


Charge.com offers online credit card processing services to small businesses worldwide.