What happens behind the scenes when you swipe your credit card?
The life cycle of a credit card transaction - explained
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What happens behind the scenes when you swipe your credit card? Find out.
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When you swipe your credit card, it sets of a process of connections and authentications to ensure your account is accurately charged for the purchase.
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In the few seconds that your card is attached to the terminal, credit card network companies, banks and payment service providers help route your transaction.
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Then comes the matter of settlement.
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Merchants provide a complete account of their day's transactions at the end of the day.
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Card network companies ensure that banks across the world are able to settle their net accounts.
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This entire process is supported by a fractional interchange fee.
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What is interchange?
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Once the entire process is taken care of, you get the transaction on your statement, along with many, many rewards.
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Why merchants opt for credit card payments.
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The popularity of online transactions has led to many more players within this system.
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When you finally pay for the purchase.
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