When you use credit cards, or even have access to a VISA card, how much money you have in your account at any given time is dependent on several things- not everyone agrees on what counts as a valid reason for running out!
A person can run out of funds due to one of many reasons: mismanagement of their budget, poor spending habits, unexpected large bills, or something more major like bankruptcy.
All big banks work via an automated process called “automated clearing house” (ACH) processing. This article will go into detail about this system and some ways that it can be manipulated.
We will also look at why ACH processing has become so popular and important these days.
The first step in processing your new credit card is to go through an initial review. This is done by one of our Credit Team members who reviews your application and then either approves or denies it.
It’s important to remember that we can’t approve you for a credit card unless we believe that you will pay us back. We look at past records, how much money you have in the bank, and determine if you are likely to repay debts on time. If there are no signs that you can meet these obligations, then we will deny your request.
The reason this is so important is because after we give you the card, you’ll be given a grace period of several days before you actually use it! During this time, while you get used to using the card, we want to make sure that you will indeed pay off your debt.
By denying you access to the card during this time, we place more pressure on you to prove to us that you will take responsibility for your spending. We hope that this helps motivate you towards better financial management.
If you need help paying down existing debts, do not hesitate to ask for our advice and tips! There are many different ways to manage your finances, and we would love to share them with you.
When you buy something using credit, your bank (the one that gives you the loan to purchase the item) sends away another company to process your credit card. This other company is called a _credit card processor_ or _merchant service provider_.
Most of these companies have their own software that works with each individual credit card company. The merchant services provider inputs the price of what you want to buy into this software, and then it prints out receipts and labels for the items being purchased.
These providers also take around half of the money you pay for the item as a transaction fee. This is how they make their profits.
The next step in processing a credit or debit card transaction is authorization. This means verifying if someone has permission to spend money on your behalf by checking whether there are enough funds in their account to pay for the item.
If there are, then the seller can ship the product and the buyer will have to confirm that they received it before payment is made. If there aren’t enough funds, then either party can dispute the purchase and things get tricky.
At this stage, our partners at VISA handle disputes very quickly and effectively. Since the cards belong to them, not you, there is no risk to them when something goes wrong.
As we mentioned earlier, over 2% of all fraud happens at checkout, so protecting against fraudulent activity is an important part of making sure your business stays healthy.
By having these protections in place, Visa ensures that sellers who run into issues cannot carry out additional fraud themselves. And for buyers, refund processes work similarly – they are protected while the company investigates and gets refunds from the merchant.
Staying ahead of fraud
Visa spends millions of dollars per year to protect consumers from fraud. These efforts include everything from advertising about how to identify fake purchases to investing in technology and people to keep watchful eyes on every aspect of the payments ecosystem.
And even more importantly, they invest heavily in educating others about what real and potential scams look like.
After you place an order, you will be redirected to purchase via VISA or MASTERCARD. If you choose VISA as payment method, then your buyer’s card info is transferred directly into our system, and your website has access to it.
If you accept CREDIT CARD PAYMENTS through Shopify, then your online store does not need direct access to each buyers credit card. Instead, Shopify processes their payments for you!
Shopify takes care of all of that behind-the-scenes work so you do not have to. It also handles refunds which some sellers may request.
You can still stay in control by adding products, managing your listings, and tracking sales at any time. Once sale happens, you will get notified and can log in to see what information we have sent you. You can check out if everything is correct and there were no issues during the transaction.
Once your sale goes through, you will receive an email confirmation from us, and then notification on your site, and then your seller dashboard to confirm the sale. Then you can transfer money from your account to yours and update inventory.
Once your wallet contains enough money to make a purchase, you need to choose where to spend it!
As we mentioned before, most major credit card companies have direct relationships with various banks so that they can process transactions.
These banks agree to accept responsibility for making sure the buyer is who she says she is and has permission to spend her money.
The banking company then processes the payment by talking to another set of computers or servers to confirm the goods are real and go into their system as owned.
This way, everyone’s computer makes a check at every step to ensure nothing fraudulent happens along the line. It becomes kind of like a chain reaction!
With this technology, there is no one position behind the scenes to create fake cards or take control of the money.
Once your buy online or shop offline trip has been finalized, you can begin the process of paying for it!
First, your card is scanned at the checkout counter by either an employee or machine. At this stage, the seller does not have direct access to your credit card information as we mentioned before.
Then, the buyer’s bank verifies that you are authorized to use the card by matching your name, address, and sometimes phone number with what was listed on your account.
If all goes well, your card is then processed using a secure server software program.
After you make a purchase, the seller notifies your bank of the transaction. Your bank then verifies that you have enough money in your account to pay for the item, and if so, they process the payment. If there is an issue or it cannot be verified as real money, then it is rejected! This happens very rarely.
A small part of this process is done over the phone between the buyer and the merchant, but mostly, it’s done via computer software programs. These software programs are used by different companies depending on which product and system they handle payments with.
There are some things that affect how quickly these checks go through. For example, if a check does not contain the exact address for where the seller ships from, then shipping company scanners may take more time to verify that information.
These computers use hard codes (dots and dashes under the skin) to match up numbers with names. Given that different banks use different systems, this can sometimes result in longer wait times.
There is an appeals process for every transaction, whether it’s a credit or debit card purchase, a cash withdrawal, or a dispute over a fraudulent transaction.
Visitors may notice some delays while their visit to your site is pending review because these transactions must go through an extensive process that includes verifying account information, confirming receipt of items, and investigating potential fraud.
For example, when you buy a product from Amazon, there is usually a window where someone verifies they owned the item before payment goes through. This protects both sellers and buyers by making sure no one else has access to the item until it's verified as yours.
The same applies to withdrawing money from an ATM or paying with a debit card at a store.
