The Process Of The Payment Using A Credit Card

Purchasing an item with a credit card undergoes a series of a complicated process before each party, the buyer and the seller, can seal the deal with a real money transaction. The buyer only has a card on his/her hand, and the seller receives nothing but digital financial statement.

How can the system work? What actually happens the moment you swipe your card on the magnetic card reader? Read this article further if you want to know.

Basic terms to know

Before discussing deeper into the process, you need to know who are the players in a credit card transaction.


Shopping using credit cardsYou are the consumer. The time you want to buy an item with a credit card, you have become the store customer and are liable to the terms and agreement for the credit card use.

The basic assumption is that you know how much your card charges you, and you are aware of the consequences are if you do not pay your debt.

Consumer bank

The bank in which you save your money holds the pivotal role of your financial information. They are the one who is going to determine if your transaction can proceed or not. And it depends on whether you have the necessary amount of loan allowance for the item you purchase.


Merchant is the store with whom you do the transaction. You are expecting to pay the price for the item the merchant sells. But a transaction with a credit card will not transfer your money directly to the merchant’s account. Instead, the fourth party is involved.

Merchant’s bank

Unless your credit card bank is the same with the merchant, your purchase is going to be a transaction between two different banks.

Credit Card Processor

Credit Card processor serves as the third party that regulates the communication between the merchant’s and the customer’s bank. Services, such as MIDTRANS and Paysera, offer surveillance and a gateway service for their clients. They will make sure that the money transferred from the client’s customer is as agreed upon the transaction.

Card Network Association

VISA and MasterCard are the two examples of Card Network Association. What they do is not to supervise the approval of a credit card. Instead, they offer a network in which the transaction can take place.

The process

Card ReaderOnce you swipe your card on the reader, the merchant will gain the purchase information and put the amount of money that is going to be deducted from your account. This transaction information is then processed by a processor.

The processor will send the information to the Card Network and then passed to the customer’s bank. The verification and authentication happen at this stage. If your balance or allowance is not adequate to make the purchase, the payment request will be rejected. Otherwise, it will be approved.

The last process takes place at the merchant’s counter. There you will know whether your card has been ‘approved’ or ‘declined’.

How quick it is

card readersSix parties are involved in a transaction, and with the modern Internet connection, the communication between them can be done in no more than 20 seconds.

That is how complicated a credit card use is. So the next time you are wondering what happens with that simple swipe of plastic card of yours, you will know that it is more than it seems.

Best Tips When Claiming Your PPI

When you take a loan then you will be expected to take a payment protection insurance this also occurs when you take a credit card. But so many people don’t know that when you get the protection payment insurance, it’s only for a while, and you can claim it back. So if you a have no idea of the best tips that you can use that will guide you through the process then you might not get the best. So if you have applied for a loan and wished to claim the protection payment insurance, you can, but you have to do it how it’s supposed to be done. The best tips when claiming the protection payment insurance includes.

Check account paperwork

pile of coins

We all know that you are supposed to keep every document safe because one day it might be needed. Go through all the documents that you got when you were getting the loan or the credit card and check if you have any references to any payment you made that was supposed to be protection payment insurance. The payment will be in documents like the statements, agreement forms and the receipts they will make sure that they have included the terms of the insurance and how much you paid for it. If you misplaced some of the documents then ask the bank to help you out because it’s most likely they will have them.

The turnaround time

Even though you need the protection payment insurance fast you have to know that there is a duration that you are supposed to wait so that you can claim the payment. For so many banks through it differs you have to wait for like six years after you have paid back the credit that’s when you can claim. You have to check with the bank so that they can check in their database if you are eligible to apply for the insurance.

Write the claim

coin bills

You may not know that the company that gave you the credit card will be the same as the one that gave you the loan so when claiming the protection payment insurance it will be an issue. They will check, and if you have not cleared the loan, then it will be difficult for them to give you the insurance. So write to them about the claim that you have and see if they will have an issue with that just make sure that you follow up with them so that they don’t take the time to give back the PPI. Click on the highlighted link on the best way to reclaim ppi.