Point of Sale Approval

POS1

When a customer swipes his or her credit card, the terminal immediately sends an approval request to your bank.

The bank sends along the request to the credit card company, which checks with the customer’s bank to make sure the customer has the appropriate funds to make the purchase.

POS2

The customer’s bank sends an approval to the card company, which sends an approval to your bank, which sends an approval message back to the terminal.

Once this approval comes through, the payment is now guaranteed by the credit card company, and you can proceed with the transaction.

The terminal computer stores the transaction for later batching (more on that in a moment).

End-of-Day Batching

For efficiency’s sake, funds from credit card sales are sent to your bank account in one deposit, typically at the end of the business day. Here’s how that process works:

batch1

The terminal sends a batch request to your bank.

Your bank then sends separate requests for funds to Visa, MasterCard, and any other credit card companies.

Each card company then sends fund requests to each customer bank.

batch2

The customers’ banks transfer the appropriate funds to the credit card companies, which in turn transfer the funds to your bank account.

In this way, you receive a single deposit for all of the day’s credit card sales.

If for some reason the customer does not pay back the credit card company for the purchase made at your store, you will still receive the funds. The problem is left with the credit card company to settle. Again, once the transaction is approved at the point of sale, the card company guarantees your payment.

This risk management is one of the reasons that credit card companies charge the fees that they do. With CMS, our more direct relationship with Visa and MasterCard allow us to avoid some of the additional processing fees that other merchant service companies include.

Learn more about our Low Rate Guarantee.