The payment processing cycle can be frustrating to understand. We’ll break it down into two easy steps for you: Authorization Once a cardholder provides payment details for an amount owed towards goods and services, the merchant requests payment authorization through their secure payment gateway. For eCommerce merchants, this is done directly via their online payment form or shopping cart. At that point, their merchant processor transmits the payment request to the cardholder's issuing bank where either an approval or decline is received. The response then goes back down the communication ladder from issuing bank to merchant processor to payment gateway and finally, the merchant. This entire process happens in a matter of seconds! Funding At the end of a business day, a batch file containing all approved charges is sent to the payment processor. This most often occurs automatically at a specific time the merchant specifies, but also can be done manually if needed. Once a batch is sent for processing, all respective issuing banks ensure the requested payment amounts are either withdrawn from a checking account (debit card processing) or charged against a cardholder's line of credit (credit card processing). The total batch amount then settles, and funds due to the merchant are deposited into their business checking account.