Credit Card Verification and How it Relates to Processing

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A man sitting on floor ,looking at a credit card and a laptop on his lap - Credit Card Verification and How it Relates to Processing.



Understanding the whole process of credit card payment processing can be overwhelming but is a necessary step in becoming a merchant whether you are a brick and mortar or an online store. Knowing the process and the terms of the entire process are one way you can ensure a great customer experience. It will also make sure that you get the best services and keep your bottom-line right where you want it.


In this article, we will be looking at one aspect of the process and the role it plays in the entire process itself. So, let’s jump into what is credit card verification and why it is so very important.


What is Credit Card Verification?


This is the part of the credit card process where the merchant sends the info to the issuing bank to make sure that the card is authorized to make purchases on their account. This line of defense is the first in the fraud barriers used to protect the customer and the merchant from charges and transactions that are not legitimate. The verification is usually done through checking a few key numbers on the card itself. These are:


Card number

Expiration date

Address & postal code



So now that we understand what the verification is let’s talk about where in the process it occurs.


What Part of the Process Does It Happen?


There are three steps to the entire process of credit card payments. The first is Authorization. This is where the information attached to your card is sent to the issuing bank to authorize that the customer and the card are approved for this transaction in question. Once this part of the process is finished the acquiring banks send a message via online connections to the merchant. This process and the next almost happen simultaneously. At the same time, you are looking for authorization the verification is happening in the background. The system takes the number mentioned above and matches them to the cardholder’s information and the account info. Once everything is verified then the transaction heads to the final stage where the transaction is settled and cleared. This usually happens at the end of the day.


Okay, so now that we have a good idea of the overall stages of the process, we can take a deep look at why the verification of the credit card is so very important.


Why is That Step Important?


This step is key in protecting the customer’s information and identity. For the merchant, it is a protective step to prevent a transaction that leads to illegitimate claims. By not enabling your verification system you could be increasing the risk of transaction that leads to no money earned. If your system doesn’t work correctly these transactions will eventually be declined and you may end up missing out on the money-making its way to your account.


So, as you can see this step in the process may very well be the most important for both you and your customer. by making sure you understand this you will be showing a heightened level of customer service and protect yourself from potentially liable transactions that people may try to propagate against you.


Final Thoughts


There are a lot of processes that you must learn when setting up your merchant business. Understanding every process from the building of your website to the credit card processing system will help you make your set-up easier and less stressful. Of all the systems understanding the way you get paid may be the biggest and to ensure the protection of yours and your customer’s info and data may be the most important. The verification of the credit payment is one of the stages that make the cost difference. So hopefully you now have the information that you need to understand just how important the verification process is.

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