de Sousa, Director, AbleStable
Credit card transactions have transformed the global
economy and yet security concerns are never far away.
This article is about the process of how credit and
debit cards are used on the internet.
How on-line transactions
process a card transaction goes through is very fast
and very complicated. The example that follows is
of a real-time credit card transaction. The customer
has selected goods or services from a merchant's web
site and is about to pay for them.
1. The customer selects "credit card" as
their method of payment.
2. Most often their browser will connect to the website's
secure server (https) and a secure icon will appear
on the browser taskbar.
3. The customer enters their credit card information
on the secure payment form, and authorises the transaction.
4. The transaction data flows to the website's secure
server using SSL (Secure Sockets Layer) encryption.
5. The secure server connects to the merchant's processing
bank either via a Secure Payment Gateway (a third
party who provides the connection to the processing
bank via a land line), or directly (some processors
have their own proprietary Secure Payment Gateway
and therefore do not require a third party to provide
6. The processor polls the card network, such as Visa
or MasterCard, directly, and the validity of the card,
and availability of funds is confirmed.
7. If the transaction is approved, an authorisation
code is returned to the processor, or to the Secure
Payment Gateway from the processor.
8. The authorisation is encrypted by the Payment Gateway
or processor and transmitted in encrypted form to
the Web server of the merchant, which triggers fulfilment
of the order.
9. The merchant's web server then sends the customer's
browser a confirmation receipt.
10. The amount due is moved from the card holder's
bank to the merchant's processing bank. The merchant's
processing bank will then move the money to the merchant's
local bank within 2 to 3 business days.
for customers using cards on-line
are a number of common sense guides for customers
to follow when using their credit/debit cards on-line:
1. Take time to browse the merchant's web site taking
contact page; and frequently asked questions page
(faq). Get a feel for how much care they've taken
over developing their site. If their site is full
of broken links, poor help and information, it is
likely their after sales service will be equally
2. Use one credit/debit card for all Internet transactions.
That way it will be easier to trace any problems
associated with your Internet payments.
3. Make sure your card allows just enough credit
for the amounts you plan to spend on the Internet
and does not have a very large credit balance.
4. Read the merchant's terms and conditions or at
the very least scan them and check to see if there
may be any potential problems (you might check their:
returns policy; refund policy; and clearing policy).
5. Feel comfortable about asking the merchant to
provide you with the e-mail addresses or URLs of
at least five customers to contact as references.
6. Ask the merchant if they are willing to put everything
in writing, including all fees.
7. Enquire the name and location of the processing
8. Find out when funds will be drawn (Look for 3
days or less).
9. Make certain the bank the merchant is partnered
with is insured against on-line freud.
10. Ask if the merchant is a member of a business
The most important principle to practice when using
a credit card online is to use a separate card with
a low credit limit to 1, keep your overall risk
is low and 2, to easily monitor your Internet transactions.
One last piece of advice. Use a separate 'public'
email address rather than your personal email address
when completing online forms, as no matter how who
the company is, you'll end up receiving Spam as
your email address leaks out.
de Sousa is the Director of AbleStable®.
Mike has been commissioned as an artist, music
composer, photographer, print and web site designer,
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