Navigating the Credit Card Processing eCommerce Ecosystem

Today, credit card processing remains one of the most critical aspects of a thriving economy. Imagine you open an online coffee business called Cup of Joe’s. People can purchase bags of fresh coffee either on your monthly subscription model or per bag. As the owner, you’re looking for a payment processor that can make the payment experience fast, simple, and effortless for both you and your customers.

What is Credit Processing?

Your customers need to use their debit or credit card to process every transaction. Credit card processing is one of the most popular payment methods for online purchases. You may not know a lot about what happens when credit card payments are processed, but don’t worry, BillingTree is here.

After a customer pays using their credit card, there are two ways that a merchant can collect that payment information. They could either use a credit card reader, which is most common or use a payment gateway. Then, companies like BillingTree will collect that information and send it to card networks.

Behind the Scenes of Every Credit Card Transaction

Card networks, like Visa and MasterCard, send the consumer’s data to their bank. The bank uses various security measures to ensure the customer has the appropriate funds to complete their purchase. If the purchase is approved and the customer has adequate funds, the bank sends a message back to the card network and through the processor, telling the merchant (you) that the transaction has been approved. The customer will also receive a message alerting them if the purchase was denied or accepted.

Essentially, the credit card processing system is circular, from the customer to the merchant, to the credit card processor, then to the card networks, then to the bank. Following that, the information sent by the bank goes through the previous channels to end back with the customer.
A customer’s transaction may be denied due to,

• The customer has insufficient funds.
• They have reached their credit card limit.
• The purchase might be fraudulent.


When you choose a payment processor, understanding how an eCommerce credit card transaction happens can help you choose a partner that’s right for your business.
If you’re looking for a fast and seamless credit card processing system, contact us today or request a free demo below to learn more.