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Credit Card processing and terminology

Index of Articles CLIENT vs. SERVER in E-COMMERCE STOREFRONTS ARRAYS AS ON-LINE STORE DATABASES TAKING THE MYSTERY OUT OF TAKING CREDIT CARDS TECHNICAL DETAILS OF CREDIT CARD TRANSACTIONS AND THE NETWORK PROCESS SELECTING STOREFRONT SOFTWARE COLDFUSION AND THE ECHO COMMERCE GATEWAY THE NUTS AND BOLTS OF INFORMATION SECURITY

THE NETWORK An ASP (Application Service Provider) financial network transaction. YourStore Assemble a Purchase Order based on customer selections and the preferred method of payment. ASP Receive PO information and post to order logs. When payment by credit card on line is requested, return an encrypted form to YourStore for gathering customer cc information. YourStore Take a customers credit card information, check for bogus entries, and pass card information on to ASP. ASP Receive credit card information from YourStore, post to corresponding order record and configure a card transaction query to Gateway Processor using the store Merchant parameters. Gateway Processor Log credit card and store information and provide a gateway interface to the financial network designated by your Merchant Bank. Financial Network Get an authorization from your customers bank for a payment to your Merchant Bank and return status information to Gateway Processor. Customer Bank Authorize a debit from your customers account. Debit the account upon settlement of the transaction. Merchant Bank Receive a credit to your account upon settlement of the transaction. Gateway Processor Log a record of the transaction and status and pass the information back to ASP. ASP Receive and evaluate transaction status from Gateway Processor. Update order record with transaction results and return an appropriate financial transaction message to the customer. A failed transaction results in the order being denied with a return message to your customer offering alternate payment options. A successful transaction results in a customized confirmation message to the customer, a copy of the order e-mailed to the store, and a confirmation copy e-mailed to the customer. Other transaction responses can result. ASP responds appropriately. YourStore Display a customized transaction response message to your customer. The financial network credit card process. A Merchant Account can be on one of three basic types of financial networks: Terminal Capture (AuthOnly), Host Capture (PostAuthCapture), or Host Capture (AuthCapture). NETWORK >> PROCESS v AuthOnly PostAuthCapture AuthCapture Authorize Any time a credit card is submitted to a store for payment, it goes through a three step process before funds transfer to the merchant account. The steps are: AUTHORIZE, MARK, BATCH COMMIT. Depending on the financial network and some automated proceedures via the financial gateway, these steps may be transparent to the merchant. Authorize puts a hold on the clients available credit for the amount authorized and for a duration set by the bank issuer. Mark Assemble authorized card transactions into a batch prior to settlement. A financial gateway may do this automatically with Auto-Mark during a specified time window. Automatically batched by the financial network, but must be submitted for settlement. A financial gateway may do this automatically with Auto-Mark during a specified time window. Automatically batched by the financial network. Batch Commit Marked (batched) transactions are submitted for Settlement (Captured). A financial gateway may do this automatically with Auto-Settle Marked (batched) transactions are submitted for Settlement (Captured). A financial gateway may do this automatically with Auto-Settle Automatically captured (settled) by the financial networl. UnMark All Marked (batched) transactions will eventually be settled, either automatically, or manually using Batch-Commit. UnMark is used remove a particular transaction from the batch; The authorization will remain available for subsequent batching and settlement. Void Voiding an authorized transaction permanently removes it from the list of transactions available for batching and/or settlement. This can only be done if the transaction has not already been closed (captured) by the financial network. Return The Return process is used to refund all, or a portion of, the amount charged on a single transaction. A return can only be made after settlement (capture). Settlement (Capture) Settlement means funds actually transfer into an account at the Merchant Bank. An ASP generally provides a browser based graphic interface to Merchant Transactions by working from the order logs. This way the status of the financial transaction and the order itself are kept in one place.