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What is payment processing?

You need a secure way to handle credit and debit card transactions across all your sales channels, from the storefront to the street to the web. Fortunately, you have options.


Payments in seconds

A payment processor handles non-cash transactions like debit card, credit card, gift card or even paper check payments.

How it works

Step 1

A cardholder swipes a card’s magnetic stripe, inserts its chip into a terminal, or uses its chip to exchange data with a card reader. The merchant submits the transaction to a payment processor.

Step 2

The payment processor sends the information to a payment network to verify the card details with the issuing bank and relays the information it receives to the merchant.

Step 3

The merchant batches and submits the transactions to the payment processor for settlement. The issuing bank bills the cardholder and pays the payment processor, and the payment processor pays the merchant.

Definitions

What's a merchant account?
You can't accept and process card payments without a merchant account. Your merchant account is what allows credit card companies to pay you or take back funds from fraudulent or disputed transactions.
What's a payment gateway?
When customers enter their payment information into an online form, the behind-the-scenes technology that processes those payments is the payment gateway.

What you need

Brick and Mortar locations
Payment device and a merchant account
Mobile businesses
Payment device and a merchant account
eCommerce
Payment gateway and a merchant account

Help protect your data

PIN debit vs. signature debit

Accepting PIN debit payments, which requires a customer enter their PIN (personal identification number) for identity verification instead of signing a receipt, reduces the risk of misuse of stolen cards.

Signature debit mirrors the payments process for credit card transactions, allowing customers to pay with a card that directly accesses funds in their preferred accounts.

Encryption and tokenization

Eliminate the need to store account numbers in your data environment and reduce the chances of a data breach.

From the moment a card is swiped, card data is encrypted, transmitted for processing and replaced with a token — rather than the card number — for the merchant to store. If stolen, tokens cannot be monetized by criminals unless they have access to the encryption key.

Tokenization gives merchants confidence that customers' payment information remains protected.

EMV® chip-based technology

EMV is a collaboration between EuroPay, Mastercard® and Visa® and was implemented in Europe in the 1990s. The chip on EMV cards is a microprocessor that provides a unique code for each transaction, helping prevent card data from fraudulent reuse. Although more secure than a magnetic card stripe, EMV chips do not protect cardholder data once the payment method is validated or while the payment is processed.

Learn more about EMV from Bank of America Merchant Services

Customer authentication

Help guard against fraud in online transactions by adding opportunities for the customer to confirm their cardholder information prior to the payment authorization at check out.


About Bank of America Merchant Services

Payment experts

We complete payments of virtually any size, at any time, on any device, for every business category we serve.

Merchant problem solvers

Through our consultative sales approach, we help solve merchants’ challenges based on business needs.

Innovators in seamless payment solutions

We provide easy-to-access emerging technologies and systems that help merchants improve the consumer payment experience.

Connect with a Bank of America Merchant Services business consultant