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Credit card processing can be a profitable service to offer, especially if you own an Internet-based business. Over 90% of online transactions worldwide have taken advantage of credit card payment services because they are fast, convenient, and secure. Understanding how credit card payments are processed is a challenge, however, because most of us never see what happens behind the scenes. Below is a summary of how credit card processing works online.

• A customer enters credit card information to purchase your product or service.
• This data is passed to the merchant web server and a payment gateway through a secure socket layer (SSL)*.
• Once the payment gateway receives the transaction data, their software verifies all of the credit card information and then accepts or declines the credit card.
• The payment gateway sends an email receipt to the merchant web server and to the customer.
• Along with the email receipt, the payment gateway sends the order to the merchant bank. The money is subtracted from the purchaser's credit card account and placed in a 30-day holding merchant account owned by your business.

*Note - The SSL encrypts the credit card data in order to pass it down the wire and to protect it from computer hackers.