Credit Card Processing

Credit Card Processing is the term used to describe the complex process of electronically verifying and transacting a credit card (authorization) in order to initiate an ACH transfer of funds from an acquiring bank to a merchant's direct deposit account (DDA) (clearing), and then to have the issuing bank reimburse the acquiring bank (settlement).

Credit card processing can be broken down in to three distinct steps called authorization, clearing, and settlement.

Pretty confusing, huh? It's really not too hard to follow once you have the process described in detail. You can read more about how credit card processing functions in the Merchant Account Guides and Tutorials section of the merchant Council.


The process of transacting credit cards from authorization, to clearing, to settlement.