- The Cardholder Makes a Purchase
When shopping at a store, restaurant, hotel, or online marketplace, the customer chooses to pay with a credit card.
The payment can be completed by tapping the card (contactless payment), inserting it into a payment terminal, swiping it, or entering the card details for online purchases.
- The Merchant Requests Authorization
After the card is used, the payment terminal or online payment gateway sends an authorization request to the issuing bank.
The bank checks several factors, including:
- Whether the card is active.
- Whether sufficient credit is available.
- Whether the transaction appears legitimate.
- Whether the card has been blocked or reported lost.
If all requirements are met, the transaction is approved within seconds.
Once the transaction is approved, the issuing bank transfers the payment to the merchant.
This means the merchant receives payment immediately, while the cardholder owes the bank the amount spent.
