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If the GWC Valves company really wants to start moving towards having an  e-commerce website, they should primarily accept credit cards as their method of payment due to various reasons and benefits. When it comes to a credit card transaction, this requires authorization by the cardholder. The process works by the cardholder presents a payment card to the merchant, the authorization request is being initiating when the merchant swipes the cards, the POS terminal sends the information to the acquirer, the acquirer routes the authorization request to the specific issuer through the network to ensure that the card was not reported lost or stolen and that sufficient funds are available. The issuer then blocks the funds for the amount of the transaction. Followed by this, the response is then transmitted back to the merchant and the transaction becomes completed if the authorization is approved, otherwise the merchant is notified of the decline.

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How Credit Card Transactions Work

When it comes to clearing and settlement, first the merchant sends a bath of transaction to the acquirer, the acquirer sends the information to credit card association, the credit card association will then debit the issuer for the amount of the transaction minus interchange fees, and credits the acquirer minus interchange fees. The issuer will post the transaction to the cardholder’s account, and once a month sends a statement to the cardholder and they send a payment to the bank. The acquirer credits the merchant’s checking amount for the amount of the transaction minus discount fees. The approximate costs for credit cards differ between the different parties. The customer whom is the cardholder is the person that pays for a service or product to a merchant via a credit card and they may pay a currency exchange fee of 1-3%. The credit card associate is a non-profit association of card issuing banks and sets rules and regulations for issuing banks and acquiring banks. The issuing bank offers card association branded payment cards directly to consumers. This bank bolls the cardholder for repayment and deduct an interchange fee to the merchant, which is set by the card association. The acquiring bank accepts payment on behalf of a merchant and they charge acquirer fees that vary at the acquirer’s discretion.

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