The process of transmitting sales information to the card-issuing bank for collection and reimbursement of funds to the merchant and monthly billing to you, the cardholder.
Here is how the process works:
- After receiving authorization for the transaction, the merchant captures the account number, purchase amount and card expiration- the merchant submits a settlement file from the POS terminal.
- The Acquirer passes this information through the back end settlement system, which forwards the transactions to the associations.
- The back end system then deposits the amount in the merchant’s bank account.
- Acting on behalf of the acquirer, the back-end processor issues to the merchant a statement every month summarizing the processed transactions.
- The issuer then bills the cardholder through a monthly statement for the transaction amounts debited from their account/line of credit.
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