Card Payment Process

Card Payment Process Explained

Unless a cardholder later disputes a transaction, the card payment process for card present or face-to-face transactions is very simple:

• When your customer makes a purchase you insert or swipe their card through your terminal - or key in their card number if you're taking an order by fax or phone.
• You key in the amount the transaction is for.
• If the transaction is face-to-face, the customer has to enter a PIN (personal identification number) to verify the purchase and that they are entering into the transaction.  This is a crucial step in preventing fraud, as a transaction that has been PIN-verified means that the cardholder cannot claim they did not make the transaction.
• The terminal then sends details of the transaction to your bank, which checks with the customer's bank to see if funds are available to complete the transaction and that the card has not been reported as lost or stolen.  If the card is approved, then the transaction is authorised.
• Once a transaction is completed, your bank continues to process the transaction and credits your account with the customer's money - usually within three to four days.  A processing charge will be made by your bank.

However, an authorisation does not guarantee that a transaction is not fraudulent or that it will not be charged back at a later date.

All payment transactions where the customer is present have been moved over to the Chip and PIN system.  Transactions using these cards will be verified by the customer entering a PIN.

The exceptions to this system include transactions where the customer is using an old-style card, some overseas cards which have not been upgraded yet, or where a disabled customer's impairment prevents them from using Chip and PIN.  In these instances a signature will be required to verify the purchase.  The card will "tell" your terminal what verification method, whether signature or PIN, is required.

Disputed payments

You should be aware that if a cardholder later queries a charge made on their card and can show that they didn't authorise it - perhaps because the card was stolen - you could be told to refund the cardholder's money.  This is known as a card chargeback.  Chargebacks can be made up to 20 days after the money has been debited from the cardholder's account after the date of the transaction.