The lifecycle of a credit card payment will differ slightly for in-store vs. card-not-present transactions. The steps for an in-store, card-present payment transaction will go like this: The customer inserts their card into the card reader, POS, or terminal to pay for a purchase. The merchant’s POS electronically sends the cardholder’s information and transaction details to the payment processor. The processor sends the authorization request to the acquirer. The acquirer routes the transaction request through the issuer for approval. The issuer receives the validation request. They verify that the transaction is valid, whether the cardholder account has sufficient funds and if the merchant’s account is in good standing. The issuer sends an “Approved” or “Declined” code, which the acquirer or processor relays to the merchant. If the transaction is denied, the purchase ends here. If the transaction is approved, the merchant receives authorization and the issuer places a hold for the amount of the purchase on the customer’s account. The merchant sends a batch of approved credit card transactions to their acquirer. This is generally done at the end of each business day. The acquirer receives a batch of transactions, collects appropriate funds from the issuers and credits the merchant account. The acquirer deposits merchant earnings in their business bank account and generally bills merchants for all interchange and related fees in a monthly credit card statement. The cardholder eventually pays the issuer for the purchase, including any accrued interest and fees associated with their card agreement.