The process steps involved in the payment process using credit cards are listed as below:
1. The consumer contacts an issuing card bank and opens a credit card account. They are issued a credit card with a unique account number and a credit line (which is how much they are allowed to spend on the account).
2. Consumer provides the credit card information to pay for the transaction whenever s/he wants to purchase any goods or services from a merchant.
3. The merchant takes the credit card information provided the consumer and attempts to validate it through tests and checks and sends it to the acquiring bank to find out if the consumer has money available on the credit card to make the purchase. There should be some communication mechanisms between the POS of merchant and acquiring bank.
4. The acquiring bank routes a request through the card association physical network to the issuing
bank to see if funds are available on the consumer‘s credit card.
5. The issuing bank checks the consumer‘s credit line and if funds are available they will set aside the amount of money that the order requires for payment. This money is ―reserved‖ only — it has not changed hands, and is not the merchant‘s money yet. At this point a reply is sent back through the card association network to the acquiring bank, then back to the merchant to let them know the status of the request for funds.