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How Credit Card Processing Works - Transaction Cycle & 2 Pricing Models

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How Credit Card Processing Works : http://www.bancardsales.com How Does Credit Card Processing Work ►►If you're looking for a way to collect payments online, this is the Best Payment page builder that I have found: http://bit.ly/2S10S7J This video explains how credit card payments are passed from the cardholder to the merchant bank account. Included in the video is the transaction cycle, and a detailed explanation of the two main pricing models. If you've ever wondered: How Does Credit Card Processing Work? How To Process Credit Cards? How Credit Card Processing Works? How To Accept Credit Card Payments At Your Business or Understanding the transaction flow, then you'll want to watch this video. It's part of a credit card processing basics video series so be sure to check back for more updates and additional videos in the series. Additionally, you can check out http://www.bancardsales.com for more tips and tutorials on how merchant account processing works. https://www.youtube.com/watch?v=avRkRuQsZ6M
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Text Comments (83)
Peachy Essay (21 days ago)
Thanks. How processor assess if a card is Qualified or Mid Qualified?
GODBOY NJOH (21 days ago)
thanks much for the video i want to run an online store and i wish to know more about payment methods. please i want to find out, does one need two separate merchant bank accounts to create visa and MasterCard or we can create it with one bank account? Also lets say one has just the the visa card will it matter if customer is paying through any other card?
Nikolajs Rubaniks (1 month ago)
what is a processor in this video, give me please an example?
H T (1 month ago)
I think companies as VISA, MasterCard or American Express
Davider Singh (1 month ago)
Good to know how it really works. I want to start my own e-commerce business and was going through tones of different webinars and pdf's. This video I found most valuable. Additionally you can check out what I found: https://pay.g2a.com/blog/grow-your-ecommerce-business-ebooks/
Esther Whitney (3 months ago)
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Paul Hudson (4 months ago)
be careful if you paid with payment aggregator. Search information about payment processor company on the web or use a popular payment system like Amazon Payments, Orangepay, Dwolla, Stripe.
Justice Hussein (5 months ago)
You are obviously reading from a sheet. It would have been better if you slowed down and took a breath.
BancardSales (5 months ago)
You are correct about the script :) (this was one of my first videos posted years ago) Anyway, the info is still accurate! Thanks for watching !
Ms Money Boss (6 months ago)
this is the kind of video that people should be watching instead of those which will actually teach you to keep on spending your money
BancardSales (6 months ago)
Thank you. Glad you enjoyed it!
Fabian Horvath (7 months ago)
Andrea Lopez (8 months ago)
ismael samuel (8 months ago)
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Stephanie Hale (9 months ago)
*You are the man. It's sad that most of the people from outside the payment industry don't understand, even at a high-level, the ecosystem of payments. Everyone knows Visa and MasterCard, but no one knows what they do and how they make money. For the majority of the people, it's just a logo on their card. These companies, both networks and merchant acquirers/payment processors, are very profitable. These are essentially technology companies with very low overhead and highly scalable business. I briefly worked for Vantiv/Worldpay and had a time of my life learning about the industry. Thank you for this awesome educational video. You should charge your own interchange for doing this video. :)*
BancardSales (9 months ago)
Very cool. I'd welcome a conversation any time if you'd like to talk. Thanks again. - Brian
Stephanie Hale (9 months ago)
I work for MasterCard now. I work in IT in the areas of product and project management. Most of my experience, 7+ years, has been in payments, banking, and FinTech (Financial Technology).
BancardSales (9 months ago)
Thanks for the comment. I appreciate it. I'm sure you did learn a lot working for Vantiv and Worldpay. Charging my own interchange would be great, btw! As you said, I'd be a lot more profitable if I could! Haha. Are you still in the business or doing are you doing something different? - Brian
Nnanna Ebiri-okoro (9 months ago)
thanks Ramesh
jffsmth330 (10 months ago)
Good info. Quick question: do "processors" typically include the physical card reader used in POS transactions? Or is it common to mix card readers amongst processor service companies?
ismael samuel (8 months ago)
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BancardSales (10 months ago)
It's a mix. Typically the terminal manufacturers build the hardware so that they can integrate with all the processors. Some processors do build their own software to be installed on the hardware. So both scenarios are present.
Brendan Stubbs (10 months ago)
How can I accept cryptocurrencies
Sascha Konietzko (10 months ago)
google commerce coinbase, don't need to worry about none of the stuff on the video then
Hardly Confused (11 months ago)
Good explanation, however, does not cover American Express which is different from Visa/Master. How about China Union Pay?
Stephanie Hale (9 months ago)
The major difference, for the most part, is American Express issues its own cards as well. You can go to its website and apply for a credit card. You can't do that in case of Visa and MasterCard, except certain travel cards. Credit cards and debit cards with Visa or MasterCard logo are issued by your traditional banks, such as Bank of America, they also issue American Express credit cards.
BancardSales (11 months ago)
What would you like to know about AMEX? There are similarities and differences but the differences are subtle. lmk.
Hardly Confused (11 months ago)
I heard Amex processing is different from visa/master.
BancardSales (11 months ago)
What would you like to know about Amex?
Nadine Campbell (1 year ago)
Curtis W Yokum (1 year ago)
It's very helpful and understanding Video. Thank You For This Video. #highriskmerchantprocessors
Avraham Solomon (1 year ago)
Great website for High Risk Merchant Accounts is http://cheaphighriskmerchantaccount.com/
Quan Nguyen (1 year ago)
Dang Thien Quoc (1 year ago)
It is very interesting to learn more about...
Chandan Borasi (1 year ago)
Nice explanation
BancardSales (1 year ago)
+Chandan Borasi >> thanks for watching!
Aaric Douglas (1 year ago)
Your Explanation is really nice... #ChargebackExpertz is also work for prime necessity to Fight, Manage and reduce Fraud.
Sandeep Patidar (1 year ago)
Great Video with point to point explanation... #merchantstronghold
Zes (1 year ago)
no such thing as important to remembx, or rememberx or notx
kunal rai (1 year ago)
Really Nice and Clear video. Please keep it up...
BancardSales (1 year ago)
+kunal rai thank you and glad you liked it. Thanks for watching.
JNB 1 (1 year ago)
hi this is Ritesh i want to start Pos business as now distributing Mosambee to end user merchant but now i want to bring my own brand product so how to initiate it ... please guide
Binsa Bose (2 years ago)
where is the 1.79% coming from ?
BancardSales (1 year ago)
+Binsa Bose >>> the 1.79 is just a sample rate used for comparison. It could easily be 1.85 or 1.9. It was just used to demonstrate the differences between tear and interchange Plus pricing programs. Thanks for watching :-)
BancardSales (2 years ago)
Are you referring to the sample transaction @5:28? If so, it's just a sample qualified rate that was chosen for the purpose of illustrating the difference between tier based pricing and interchange plus.
Kristina Estrada (2 years ago)
Hello i can help with credit card processing. I work for a direct processor. we offer whole rates under a percent most of the time with no contracts. free equipment next day funding and an honest company with a A+ rating with the bbb. feel free to call me at 1-866-652-7760 ext 6505
Anomalous lover (2 years ago)
But how these information goes from one point to another? I mean by which type of connection are they?Is it LAN,WAN,or connected by satellite,wireless,wired, or what? Please help!!!!!!!
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Ben Njathi (2 years ago)
Excellent explanation!
Jack Smith (1 year ago)
This is extremely decent video about credit card processing. A credit card processing blackout can cost vendors hundreds, if not a great many dollars, contingent upon the length of the blackout and the normal ticket volume they process. In the event that you require some assistance so you can allude this connection address.(https://goo.gl/MMtLDU)
It's Mal (2 years ago)
Great presentation! How does or what software is used by Credit Card Processing companies to determine the qualifications of the transaction? I.e, How would the software identify when a Business card or reward card is used to properly category the transaction into the "Non-Qualified" category? I know the Bank Identification Number (BIN) is crucial in the process.
BancardSales (1 year ago)
Thanks for watching! Interchange is the governing set of rules/rates in the merchant account industry. Interchange is a rate table that all merchant account processors have to adhere to. When a card is accepted at the point of sale device, the bank that issued that card is "called" and thus matched with an interchange category that holds a specific rate. With tier based pricing, each processing company sets their own qualified, mid-qualified and non-qualified rates so the "qualification" (i.e. the rate charged) can vary from processor to processor.
se7ensnakes (2 years ago)
Banks are issuing counterfeit money! Credit cards as they are issued is illegal per article 1 section 8 clause 5 of the US constitution. here is something that they will not teach you in this video. Where does the money come from when money is placed in a credit card account? FROM THIN AIR. Banks are creating their own proprietary, endogenous money and inundating the economy with it! There are so many dumb people out there that cannot figure out how this hurts them economically.
Kyle Anderson (1 year ago)
You are dumb next your gonna tell me they just make up stock prices and 12 Assholes at a huge building change them 80times a day lol like picking lotter numbers
Kurt Karjalainen (1 year ago)
The Money comes from the Card issuing bank. That bank then bills its customer the consumer for the charges it made at businesses. Card issuing banks make money from the Interchange and from the consumer not paying off her or his credit card at the end of each billing cycle. Banks are not creating their own proprietary money. They have real dollars they must deposit with Merchants each day and collect real dollars from their customers at the end of each billing cycle.
Edward Simmons (1 year ago)
Goa's Voice (2 years ago)
If my card limit of spend is 10 thousand and i spend 1000 only in month at one time purchaise. What interest i wll be charged ? I hve to pay interest only on 1000 or have to pay interest on remaining balance 9000 which i didnt used to purchaise anytg ? I am waiting for ur kind informatian and its important to me Thank you
steven ln (3 months ago)
No interest will be charged if you pay back the money on time. No, you won’t get charged interest if you don’t use your remaining 9000 balance.
Kelly KitKat (2 years ago)
So, interchange is a function of which card the customer uses..
apacha apacha (2 years ago)
Excellent stuff,Based on the same principle ,How can one price on e-commerce merchants?
BancardSales (2 years ago)
The pricing principles apply to retail and ecommerce merchant accounts. If you would like to schedule an appointment with me to talk about your situation, please head over to http://www.bancardsales.com/contact-us
Mitch Baker (2 years ago)
Woah this is complex just wanted to add Payment for my website probably have to watch a couple times
BancardSales (2 years ago)
TRAPZILLA 666 this should simplify things for you on how to set up payments on your website.. Reach out if you have questions: https://youtu.be/Jz1_MtApTaE
Lol Bob (3 years ago)
Well that bullshit then fuck America I going to the Germany in the 1940. I okay with naze and people with gas masks.
Horst Seehofer (3 years ago)
Thanks for this very good video! I`ve got just one question left, so according to your video it is okay to give out the credit card details (card number and security code) over the phone in order to make a payment?
BancardSales (3 years ago)
+Horst Seehofer -> It's okay to process credit cards over the phone. It's NOT okay to store the credit card in a paper file, or on company computers/servers. Glad you enjoyed the video!
Jason Richter (3 years ago)
I've worked in this industry forever and I never once seen a 3 tier statement that could not be easily beaten by interchange pass through, even assuming that the processor is not lying about where the card falls in the tier system. Interchange pass through would still dominate all 3 tier rates, Why?, The most popular card have the lowest rates, in tier 1 that would be 0.95-1.03% cost so if you have 1.75% tier1 your being robbed. It's that simple.
Jason Richter (3 years ago)
Nope. Sounds like your a company that sells 3-tier you all say that same thing, you know it's a lie. Your not fooling anyone except merchants who don't know better.
BancardSales (3 years ago)
+Jason Richter -> Jason, I appreciate your feedback. Whether it's interchange plus, tier based, blended rate or fixed rate pricing, it ALL comes down to the effective rate that the merchant pays and that's really the important part of the pricing discussion in this video. Thanks for watching and commenting! :)
Great channel! Check out our New Businesses that need to accept credit cards!
4 Pillars Victoria (3 years ago)
Great video! Understanding how credit card processing works can help people to be more aware of purchases using their cards.
royzmpa (1 year ago)
4 Pillars Victoria теннис.
ravi katiyar (4 years ago)
who is processor here ? someone please thanks in advance
Stephanie Hale (9 months ago)
Processors are a separate set of companies, such as Worldpay, Wirecard, First Data, etc. Visa and MasterCard are NOT processors, they are networks. They just provide the infrastructure.
aman chouhan (1 year ago)
I think processors means a terminal which is being used to process that transaction. For example: u go to Zara to buy a something. At the payment reception the card swiping maching is a HDFC machine. In this way, HDFC is a processor.
James Thomas (1 year ago)
Zach Moser (1 year ago)
Visa Processes most credit card transitions in the us for all networks
Hitesh Dayal (2 years ago)
eds9384 -
issrar khan (4 years ago)
gabriel sevillano (4 years ago)
great video !! three thumbs up !!
Katie Cakez (5 years ago)
wow didnt know most of this. very interesting

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