How Does the Payment Processing Industry Work? Understanding Infrastructure and Process

Learning about the infrastructure and process will help you to choose the best merchant services. Here we will give you an overview of how our industry works.

Process in Brief

Your terminal passes the transaction information to a payment processor and comes to the bank for approval. After that, the bank sends the authorization to the processor and terminal. All this process takes just a second.

The Key Players of This Process

Generally, ordinary people do not know about this process. As a reputed provider, we must let you know about this. There are five key players.


The cardholder has the bank card to pay for goods and services.


It is simple. The merchants mean businesses that accept card payment.

Acquiring Bank

Acquiring a bank is a merchant bank to create and maintain your merchant account.

Issuing Bank

On the other hand, issuing banks issue cards to customers. This issuing bank must be a member of the card association. Now, what is the card association?

Card Associations

Card associations are the governing body of a community of financial institutions like MasterCard and Visa. They are not a bank, but they work as a clearinghouse.  

Credit Card Authorization Process

All of the five players lead the authorization process. The first cardholder begins the process, and then the merchant uses the payment-processing device to send the information of the cardholder. 

Then, the critical part starts- now the acquiring bank transmits the information to the cardholder’s bank through the right card network, and the card association sends it back to the acquiring bank after approving the payment.

Now, you must understand the following points before you choose the merchant payment processing services.

Funding and Fees

The processor will deduct the processing fees while depositing the fund to your account. Well, there are some exceptions as well. Do not forget to ask your provider about this. We do not have any hidden charges.

Credit Card Deposits

We offer next-day funding, but you have to order it before a cut off time. Well, many other providers cannot do this. Ask your provider about this. 

Choose the Best Merchant Services for Small Business

Utility Umbrella is the best merchant service provider for small businesses in the UK. We offer secure, hassle-free payment processing services on your phone, laptop, or on the go. Do not compromise your business needs – join the Utility Umbrella community now.

If you have any questions, please do not hesitate to call us.

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