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1)Authorization
The merchant transmits to its credit card processor the buyer's credit card type and number, expiration date, the seller's merchant ID, and the amount to be paid. The credit card processor responds by confirming or denying that the amount can be charged to that credit card number. If the response is negative, then authorization is not granted and the purchase cannot occur. If the response is positive, then the amount is reserved on the credit card account for a fixed period. The merchant is given an identifier of the transaction, o be used later for settlement.
2) Verification of fulfillment (if credit transaction response was positive)
Either deliver the product being purchased, Or notify the entity responsible for fulfillment of the order, then wait for confirmation or cancellation of order shipment from that entity.
3)Settlement (only if fulfillment has occurred)
The merchant transmits to the credit card processor the identifier of the fulfilled transaction for payment is now due. The credit card processor instructs the issuing bank to debit the cardholder's account. The credit card processor instructs the acquiring bank to credit the merchant's account. The credit usually becomes visible to the merchant after approximately three days.
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