13: WHERE DOES THE INFO GO?

Have you ever wondered, "When I swipe a credit card, where does the information go?" Fortunately, you don't have to worry about this. That's what the EMG team is here for! However, in order to be a smarter credit card processing merchant, EMG would like to provide you with some useful information.

To describe the 'life' of a credit card transaction, we chose a Visa transaction cycle as an example, since Visa is the #1 card type accepted worldwide. However, the MasterCard, American Express, and Discover networks all operate similarly. First, we’ll explain the terms used in card processing:

• A cardholder is an authorized user of Visa payment cards or other Visa payment products (a customer).
• A merchant is any business entity that is authorized to accept Visa cards for the payment of goods and services (you as the business).
• A merchant bank is a financial institution that contracts with merchants to accept Visa cards for payment of good and services (your processor, Eliot Management Group).
• A card issuer is a financial institution that maintains the Visa cardholder relationship. It issues Visa cards and contracts with its cardholders for billing and payment of transactions (your customer’s bank).
• Visa is a membership corporation of financial institutions that issue Visa cards and/or sign merchants to accept Visa cards for payment of goods and services. Visa provides card products, promotes the Visa brand, and establishes the rules and regulations governing member participation in Visa programs.

Now, let’s run through a scenario of a customer purchasing a product from you:

1. A customer comes into your store to purchase a product. They give you a Visa card to pay for their merchandise. If you have an online shopping cart or take an order over the telephone, your customer gives you the card number, expiration date, billing address and safety code on the back of the card.
2. You either swipe the credit card or key in the card information, enter the dollar amount and other transaction-related information, and transmit an authorization request to the merchant bank (EMG).
3. EMG electronically sends the authorization request to VisaNet.
4. VisaNet passes on the request to the card issuing bank to determine if there are sufficient funds to allow the transaction to go through.
5. The card issuing bank approves or declines the transaction.
6. VisaNet forwards the card issuer’s authorization response to EMG.
7. EMG forwards the response to your credit card terminal or software.
8. You will receive an authorization number (or decline code) and complete the transaction accordingly by acquiring a customer signature and/or providing them a copy of their receipt.
9. At the end of the business day, the transactions are settled to EMG, who electronically submits those transactions to Visa for payment.
10. VisaNet facilitates the settlement by requesting that EMG receives the money for the transaction and that the credit card holder’s account is debited the amount of the sale.
11. EMG will post the transaction to your bank account.

If you would like to know more about this process, go to the Visa website and click on 'Rules for Visa Merchants.' You can also call our customer service line at 800-789-8897, option 2.