In this process, the ACH network can be used to by a card association network like VISA to settle a transaction and by the merchant's acquiring bank to pay the merchant.
Settlement.
After a credit card purchase is allowed by the cardholder's bank, the card association network has to transfer the money from the cardholder's account to the bank that handles the payee's merchant account to settle the transaction. The ACH network can be used to transfer the funds, either by a third party payment processor acting on behalf of the bank, or by the card association network to transfer money between the two institutions directly.Merchant Payment
The ACH network is an electronic price manner that financial institutions voluntarily participate in to transfer capital to one another. All transactions are electronic, and eventualize between an originating depository financial college (ODFI) and a receiving depository financial faculty (RDFI). An ACH step can be initiated by either congregation. ACH transfers are handled by two operators: the Federal Reserve method and the Electronic Payments Network. The ACH network is duration used for an increasing assortment of transactions due to what the FFIEC describes in its 2010 Retail Bill Systems IT Handbook as a larger call for for non-recurring payments such as electronic research conversion and Netting and phone payments.
Credit Card Processing
When a credit card shop for is untrue, a multistep development occurs that can cover up to seven discrepant institutions. When the card is swiped, the merchant terminal Testament forward the system info to a card convention network approximative VISA or MasterCard, which verifies with the cardholder's bank that the obtain can be false. This erudition is relayed back to the merchant, who can then approve the method. After the obtain is fabricated, wealth are debited from the cardholder's report and transfered to the merchant's receiving bank, where they can then be deposited into the merchant's bank chronicle.The ACH network is used to operation credit card payments.The Automated Clearing Den network (ACH) is a valuation development that commercial and administration entities employment to transfer cash between financial institutions. The Federal Reserve reported that $15 trillion was transfered washed-up the ACH network in 2009. One custom of the ACH network is to transfer transactions throughout the credit card processing network.
ACH
Once the the money has been transferred between the issuing and receiving banks, the merchant can receive funds from its sales proceeds. The acquiring bank often uses the ACH network to deposit the money into the merchant's bank account. The transaction is similar to an employer-initiated direct deposit. The amount received by the merchant is gross sales volume less interchange fees and charge-backs.
