A card payment feels instant, but behind it sits a chain of companies each playing a specific role. Understanding that chain helps businesses make sense of fees, delays and declined transactions.
Authorisation
The merchant’s payment provider sends the request through a card network to the customer’s bank, which approves or declines it.
Clearing and settlement
Later, transactions are batched, reconciled and funds move from the customer’s bank to the merchant’s, minus fees.
Where the fees go
Interchange goes to the card issuer, network fees to the scheme and a margin to the payment provider.
Key takeaways
- Authorisation
- Clearing and settlement
- Where the fees go
