What is credit card processing and how does it work?

May 16, 2023 | 1 minute read

Consumers are increasingly opting for cashless payments, and businesses are racing to keep up. 60% of business owners say they have been accepting more forms of cashless payments over the past 12 months, according to the 2023 Bank of America Small Business Owner Report.1 To decide which kinds of payment solutions are best for your business, it’s important to understand the complex — yet seamless — process that allows a business to securely accept these payments whichever way customers want to pay, says Jonathan Sepulveda, senior vice president and small business product executive for Merchant Services with Bank of America. “Choosing a payment solution tailored to your business’s needs can create more efficiency and allow you to avoid paying unnecessary fees,” he says.


Below is what needs to occur for the funds from a card transaction to make their way from the customers’ account into yours.


The path to payment

Graphic that shows what happens when a customer makes a credit card transaction and how the payment makes its way from the customer’s bank account to a merchant’s bank account. Visit the link below for a full description.

1 Bank of America 2023 Small Business Owner Report, p. 11

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