Settlement
Process
Merchant processing is the settlement of electronic payment transactions for merchants. Merchant processing activities involve gathering sales information from the merchant, obtaining authorization for the transaction, collecting funds from the card-issuing bank, and reimbursing the merchant.
A typical transaction flows from the merchant to the acquirer (an acquirer is a member of MasterCard and Visa, and is contracted with merchants to accept merchant sales drafts, provide authorization terminals, instructions, and support, and handle the processing of credit card transactions. i.e Transcendent One, Inc.) then to bankcard associations, and finally to the card-issuing bank (or its processor), who bills the cardholder. Funds flow in the reverse direction from the card-issuing bank to the bankcard associations, then to the acquirer, and finally to the merchant.