Merchants or business owners are only entitled to accept credit card. It can't be done by all business entities because for that he has to open a merchant account through a Merchant Service Provider (MSP) or a Merchant Bank. After opening the merchant account, the merchant can accept payment through credit card.
The process to accept credit card involves a lot of intricacies which are given briefly below :-
First of all, a customer selects certain articles for purchase and instead of paying in cash he/she advances a credit card to the merchant.
If the merchant possesses any merchant account then he accepts the credit card and otherwise he rejects the same. But only accepting the credit card does not mean that the payment has been made. For that, proper verification of the credit card is required.
The merchant then either swipes or waves over the credit card terminal set of his shop. The informations are transmitted through the terminal to the main processing unit either through online or offline media (telephone connection, cellular services, wireless, etc.).
These information are then processed and the result is sent to the merchant's terminal either on a real time basis or on a lagged basis.
After receiving the result of verification (that is, status of the credit card) it is up to the merchant to either reject or accept credit card.
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