What credit card processing is
A merchant processor enables a business to accept card payments by routing transaction data between the business, the card networks, and the acquiring bank. The processor handles authorization, settlement, funding, and often the equipment or software used to take payments.
How a transaction moves
A payment passes through several stages: authorization, capture, clearing, and settlement. Each stage involves different parties and timing, and the structure of your agreement determines how quickly funds reach your account and at what cost.
Pricing models
Common pricing structures include interchange-plus, tiered, and flat-rate pricing. Each presents cost differently, and the effective cost depends on your transaction mix, average ticket, and volume rather than the headline rate alone.
Equipment and environments
Processing happens across card-present, card-not-present, e-commerce, mobile, and mixed environments. Terminals, POS systems, gateways, and integrated software each carry different cost, risk, and settlement characteristics.
Settlement and funding
Settlement timing — when funds become available in your account — varies by processor, agreement, and risk profile. Faster funding may carry conditions or costs; understanding your schedule helps you plan operating cash.
Evaluating a structure
The right structure depends on your business type, volume, average ticket, channels, and risk profile. Reviewing a current processing statement is the most reliable way to understand actual cost and identify whether an alternative structure may fit better.