From Cash to Bits: How Payments Work?

  • The payment processor requests the payment via the card network (Visa, MC).
  • The card network contacts the issuing bank to request approval of the transaction.
  • The issuing bank checks the security information of the transaction (PIN, CVV, card date, funds, etc.).
  • If approval is obtained, the approval is sent to the card network and in turn to the payment processor and the merchant.
  • The merchant sends a backlog of approved transactions to the payment processor.
  • The payment processor contacts the card scheme, which in turn requests the disbursement of the transactions to the issuing banks.
  • The issuing banks debit the user.
  • The issuing bank transfers these sums to the merchant’s bank.
  • The merchant’s bank deposits the corresponding amount to the merchant’s account.



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