The place of business that accepts the credit card is called the “Merchant.” In order to be able to accept credit cards, the Merchant must open a “Merchant Account” with a “Merchant Bank” which is also known as a “Sponsoring Bank” or an “Acquiring Bank.”
This is the bank that receives the “Net Settlement Amount” from the Issuing Bank after the transaction is processed. The Net Settlement Amount is the amount of the actual sale minus transaction fees called the “Discount Rate.” In some instances merchants may also have to pay “Pass-through Fees” which are additional transaction fees that are charged when a transaction does not meet some particular requirement such as passing the Address Verification System (AVS) test.
Online Credit Card Processing Steps
