What Is Credit Card Batch Processing & How Does It Work?

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Woman holding a payment card in her hand and working in a laptop - What Is Credit Card Batch Processing & How Does It Work?

When you are looking into credit card transaction processes there are two options… real-time and batch. The method that you and your business choose to use depends on several factors including the capabilities of the processor’s, Payment acceptance, and on local prerequisites. These processes require info to be saved which can either be done at the POS or the host’s server. Real-time seems like an easy to understand construct. In this method, you use online capabilities to process the transaction at the point of sale and is immediate. But what is batching and how does it work?

In this article, we will break it down so that you will feel better equipped to decide which method is the best for your business needs.

What Is It?

So, batch processing happens at the close of business and is when all your credit transactions for the day enter their final stage, the capture, to be finalized. The process of credit card transactions starts with authorization and these are what is stored in your POS throughout the day. Upon closing all your transactions for the day, or your batch is processed through your processor company’s server and final payment is taken. There are two methods that most processes go through. The manual batch is when you must run a program or report that allows for the finality of the process. The other option is an automatic batch which is done with appointed software that does it all for you at the end of the night.

How it Works

This process is really a two-step deal. The first is authorization which is the part of the process where the credit card users’ company is sent notification of purchase. This step is when you get verification that there is enough money on the account, if there have been any fraud alerts or if the person using it is the right person. Once that is all did the transaction is gone through. The final step is batching and that is when the bank deducts the purchase from the cardholders account after being notified by the processor you choose to use for your business. This process works the same for returns as well.

Why the Batch Process?

Though real-time is a great benefit, there are some good reasons to go with batch processing or a combination of both. There are many advantages of the batch processing technique and they include:


  • Faster & Less Cost


When you run or manage a business you want to make sure you keep overall cost as low as possible to help with maintaining a good bottom line and profits. With the batch processing method, you do not have to have someone to check the receipts every night. You won’t need any extra equipment and it is faster than din it manual. This will help n tony decrease payroll cost but will save time which as we all know is money.


  • Offline Capabilities


Being able to function while offline is a major benefit to any business. This process is done in the background without any other tasks added to your daily to-do list.


  • No Extra Tasks for Management


Investing in a batch processing system can take tasks off your managers to do list. This will allow them to focus on what really matters the customer and coaching their teams.

Why Not a Batch Process?

Even though this technique of transaction processing has a lot of great advantages there are of course a few disadvantages you should understand before investing in a processing software or company. Here are a few of them:


  • Training

When investing in a new system there will be some training involved. If you have a large staff this will mean making sure your managers are trained to use the system and that means payroll expenditure beyond your normal allotment. You will have to schedule the training which may take time away from your sales floor.


  • Bugs

If something goes wrong and there becomes a bug in the system the process of debugging it can be quite intricate. This may mean hiring someone for your business permanently to handle these issues or going outside of the company to find a specialist. Either way, this could lead to more payroll expenditure.


  • Cost

Investing in a batch processing system is not a small expenditure. Though it will save time, in the end, it will also cost a lot of capital upfront.



Final Thoughts

So now you know a little more about what credit card batching is and how it works. Hopefully, you feel better equipped to decide on what method is best for you, our customer and your business.


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