Terminal Responses At the End Of A Transaction

Here are some common responses the merchant will see at the end of a transaction

APPROVAL CODE
This is the response that the card used has enough credit, the sale will complete and the card is not stolen or lost. The merchant records the message on the sales draft. THE APPROVAL CODE DOES NOT GUARANTEE PAYMENT.

DECLINED
This is the response when the card issuing bank will not approve the charge. This can happen for many reasons, one being there is not enough credit line on the card to approve the sale. The merchant needs to ask the customer for another form of payment when the DECLINED response comes up. If the customer wants to know why the transaction is declined they need to contact their card issuing bank.

DECLINED PICK UP
This response is given when the card issuing bank wants the card returned for some reason. The merchant is not required to keep the card and it should only be kept if it can be done safely. The merchant should refer the cardholder to the card issuing bank.



© Eagle Merchant Services is a Chicago merchant account area provider offering the lowest cost merchant services as well as credit card machines.

The Authorization

There are two ways an Authorization can happen.

ELECTRONIC
This is when the merchant swipes the credit card through a terminal or point of sale device and the POS device sends the transaction data electronically for the authorization.

VOICE AUTHORIZATION
This is when the merchant calls the voice authorization center; the voice authorization center has a computer system that communicates with the Issuing Banks to relay transaction data. An operator gives the merchant the Authorization response that is received from the card issuing bank.

Most authorizations are done electronically but the VOICE AUTHORIZATION is a great back up if the merchants credit card machine or POS System is down.




© Eagle Merchant Services - a merchant account provider located in the Chicago area providing the lowest cost merchant services and credit card machines.

What goes on in the life of a transaction?

A credit card transaction consists of two parts: the authorization and the settlement.

The AUTHORIZATION is the permission of the card issuing bank to accept a credit card for a payment.

The SETTLEMENT is the clearance through the Visa and MasterCard settlement system of the credit card transactions accumulated by the merchant in the terminal or Host so that the merchant can be paid for them. Both Authorization and Settlement must happen before a merchant can be paid for a credit card transaction.



© Eagle Merchant Services is a Chicago merchant account provider located in the Chicago area offering the absolute lowest cost merchant services credit card machines.

What is a Check Card?

A Check card is a debit card that has a Visa or MasterCard logo that can be used as a credit card or a debit card. It is issued by a bank when a customer opens a checking or a savings account. A Check card transaction deducts the the funds from the cardholders bank account rather than in a monthly billing like a credit card.

If the customer chooses to use the Check card as a debit transaction the cardholder must enter their PIN at the Point of Sale on a PIN Pad. Once this PIN based debit transaction is completed the funds are automatically pulled from the customer/cardholders bank account. With a PIN based debit transaction the customer is not required to sign the sales receipt.

If the card is used a credit card transaction it will be processed like a credit card transaction and a signature from the cardholder is required.

What is a Chargeback?

A Chargeback is a reversal of a credit card transaction initiated by the cardholder or the card issuing bank that was used in the purchase. This is different from a refund or a credit that is agreed to and initiated at the point of sale. A Chargeback usually occurs when a when the cardholder files a dispute with their card issuing bank. This can happen when the cardholder discovers fraudulent or improper transactions on their statement.

The card issuing bank will investigate disputes and will charge back the value of the original transaction directly from the merchants acquiring bank, which is obligated by to do so under the card network rules and regulations. The merchant acquiring bank will attempt to recover an equal amount of the chargeback from the merchants bank account. Chargebacks are passed along to the merchant as policy from the acquiring bank unless the merchant can prove that the transaction in question was legitimate.

Smart Cards

At Eagle Merchant Services we get asked all the time if we can accept Smart Cards, or are our machines that we sell Smart Card capable. Smart Cards have a computer chip embedded in the credit card and when the card is passed through a Smart Card credit card machine the card can perform numerous functions or access data that is stored in the chip. These cards can be used as Debit cards or credit cards.


Smart Cards are common in Europe, the technology that is required to accept them in the United States is rare. The credit card machines and cards use the magnetic strip technology and to upgrade to Smart Card readers is to costly.

Experts predict that the Smart Card technology will become popular in the future in the US.

What is a Bankcard?

A BANKCARD is issued by a financial institution, it allows the balance to be carried over from month to month. The Issuing Bank assesses the Cardholder the interest they will pay on the unpaid balance against carrying the balance. A BANKCARD allows a purchase amount to be taken from a Cardholders bank account or through a line of credit without having the cardholder write a check.

To accept BANKCARDS merchants must be approved to process BANKCARD transactions through a bank or a credit card processor. The merchant must sign a merchant processing agreement through their merchant service provider.




© Eagle Merchant Services is a Chicago merchant account area provider offering the absolute lowest cost merchant services as well as credit card machines.