Credit Processing

There are several different methods relating to credit processing, or credit card processing.  Simply put, it is the process that enables a vendor of goods or services to accept payments by credit card from their customers.

The customer will pay for their goods or services using a credit card, which is then charged with the amount of their purchase.  The vendor then receives this amount (less fees) from an acquiring bank.  The bank then receives the original purchase amount from the customer (or at least in theory they do!).

In order to be able to process credit a vendor will require a merchant account.  This a contract they have with an acquiring bank under which the bank agrees to extend credit to the vendor (otherwise known as the merchant).  Without such an account, the merchant would be unable to accept credit card payments from customers.