Credit/Debit Card Transaction Processing Flow

The cardholder will purchase a good or service from a merchant or department in person or by phone, mail, fax, or Internet.

The merchants bank will send the cardholders information to the cardholders bank for authentication.

The corresponding credit card authorization system (Visa, MasterCard, Discover, and American Express) will conduct the necessary security checks.

For clearing purposes, and to validate the information, the merchants bank will send the purchase information to the credit card carrier clearing system. This process may take 1-2 business days.

The merchant will complete the transaction and issue a receipt to the cardholder.

The merchants bank will send an approval to the merchant.

The credit card clearing system will validate the information and send the purchase information to the cardholders bank, which will prepare the data for the cardholders statement.

As soon as the purchase information clears the settlement process, which may take 2-3 business days, the credit card company will notify the merchants bank and the cardholders bank.

The merchants bank will pay the merchant for the transaction and the cardholders bank will bill the cardholder for the purchase amount.

University of Illinois Office of Business and Financial Services Treasury Operations Merchant Card Services