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There are many steps to credit card processing – each with its own importance. The merchant account needs to have all credit cards authenticated (or verified) to determine if everything is genuine. Here is a description of the Authentication process for credit cards.

Who authenticates your credit card and PIN?

Originally, the credit card issuing bank authenticated your credit card and password. With the proliferation of the World Wide Web, this function has been outsourced to a credit card processor, acquirer or acquiring bank. Each of these entities has been given the proper key codes to check the authenticity of the customer account.

The credit card industry breaks transactions down to many categories, including “card-present” or “card-absent.” When the card is present, the customer can swipe it and type in the PIN. These are the most prevalent transactions at brick-and-mortar stores. Some cards can be inserted into point-of-sale (POS) machines or use the “near field” EMV technology.

An online merchant account is an example of the “card-absent” transaction. Vital data must be keyed into the system manually. These “card-absent” transactions involve a higher risk of fraud because the business cannot verify the physical presence of the card.

What is the authentication process?

Credit card processing has become an essential part of the modern economy. One of the wisest decisions of credit card companies was to bear the majority of the fraud risk themselves. This helped both consumers and merchants feel more comfortable about credit card usage.

A merchant account will take a debit or credit card with no question’s asked because it is not the responsibility of the business to verify the credit card. The credit card was manufactured by the credit card issuing bank.

After a consumer provides the credit card, the information is sent to the acquiring bank for authentication. The account number is compared to the list of cards for that credit card brand. The password is compared to the customer’s recorded security provisions. There is also an address check. If all of this data matches stored credit card databases, then the credit card is authenticated.

How long does authentication take?

Thanks to the development of acquiring banks and fast POS electronic devices, the authentication of credit cards can be completed within minutes. Online authentication checks may take longer.