Are you fond of using your credit card to make purchases in your favorite store? As far as you are concerned, the store cashier or your waiter just gets your credit card and swipes it on their little machine that produces a receipt for you to sign. At the end of the day, as long as there are no discrepancies with the statement of account produced by the credit card company and what you actually spent, you be at peace and you can rest easy. There are actually a lot of steps that take place when you make a transaction in your credit card. The sales person in the store first computes the total amount of your purchase. You then present your credit card to the cashier. Your credit card is run through the point of sales POS) system and the amount is punched in the cash register. An authorization request is sent to the bank if the transaction is valid. The sale is not actually recorded at that point but at a latter time. Authority is transmitted if you have enough credit to continue with the purchase. The credit used is actually just set aside or reserved. An approval or denial code is then sent to the POS system of the retail store. The machine prints out a receipt for you to sign that would allow the store to reimburse the amount from the bank. Before closing time or first thing the next morning, the store would review all the transactions registered in the POS system and the signed receipt. If all the authorizations match out, a request would be sent to bank for deposit. The bank of the store then sends a request to the credit card company for the amount of the transaction. The bank would transfer the money deducting what is called an inter charge free. The amount acquired from the credit card company is then deposited directly to the bank account of the store less a discount fee. |
