This article explains in general terms how credit card payment processing works. For more information about changing your payment options, see Managing Your Payment Settings. For assistance setting up Volusion Payments, see How to Change Your Gateway to Authorize.net.
There are two types of banks for credit card payments:
- The issuing bank — the customer's bank, where the money for a purchase comes from.
- The acquiring bank — the merchant's bank/your bank, where the money for a purchase goes into.
Who Gets Paid (And Charged) What?
When you accept a credit or debit card payment, your acquiring bank credits your account and debits the customer's issuing bank.
Your bank makes money by charging you processing fees, as specified in the merchant agreement, and other convenience charges that are usually debited collectively at the end of each month.
The customer's issuing bank makes money by charging a percentage of the transaction total to the acquiring bank, as well as by charging the shopper interest fees on their monthly statements, as specified in the cardholder agreement.
Here’s a visual of the flow of funds:
Credit Card Payment Glossary
Here's a short glossary of some of the most common terms:
The act of approving a purchase based on the fact that the cardholder’s account has enough available credit to cover the cost of the transaction. If this is not the case, the purchase is declined.
A collection of captured transactions. Authorized transactions are not usually submitted one at a time to your acquiring bank. Rather, they are “captured” and submitted to your bank for processing all at once in a “batch.”
This is the moment when you request the funds from an authorized transaction. Although the movement of funds from the cardholder's account to your account is not instantaneous, this step initiates the process. You'll typically see funds reach your checking account within three business days from the capture date.
This refers to a deposit of funds. Commonly, it’s used to describe the act of depositing refunded monies from your bank into your shopper’s account. This occurs after “cut time,” when a batch of captured transactions are submitted all at once.
The time of day that a batch of captured transactions is submitted to your bank for settlement. All captures performed after the cut time are held until the next batch.
Specifically, this refers to a deduction of funds. However, this term is also used more generally to describe the simultaneous authorization and capture of funds.
A piece of software that communicates with the shopper’s issuing bank to determine if their account has enough available credit to cover the cost of the transaction. For Volusion Payments accounts, the gateway is Authorize.net.
This term applies to 1) the cancellation of an authorized transaction that has not been captured and/or 2) the cancellation of a captured transaction that has not yet been batched to your bank for settlement
Options For Authorizing Credit Card Sales & Getting Paid
To change your payment capture settings, navigate to Settings > Payments in your Dashboard. Click on the Alternative Settings link to open a popup with your options.
Automatic Authorize, Manual Capture
The gateway attempts to authorize the credit card automatically at the point of sale. If successful, it allows you to capture the funds manually at your convenience. We recommend this setting because it preserves a seamless shopping experience for customers, while also providing you the greatest opportunity to combat fraud.
If your store is set to Authorize At Sale, Capture at Shipping, successful new orders appear in the Payment Log with Authorize listed under Payment Type. After pressing Apply next to the Capture command in the drop-down menu (default option), a new line item is added above it.
Automatic Authorize and Capture
With this setting enabled, the gateway attempts to both authorize and capture funds immediately at the point of sale. You will be unable to manually review the order before payment is captured, so this option can potentially put you at risk for fraudulent orders.
If your store is set to Authorize and Capture at Sale, successful new orders appear in the Payment Log with Debit listed under Payment Type.
Manual Authorize and Capture
With this setting enabled, the gateway neither authorizes nor captures funds at the point of sale, but rather stores credit card data so that you can perform both steps manually later, either separately or simultaneously.
This setting is more secure than Automatic Authorize and Capture because it enables you to examine the order before capturing funds. But it’s less secure than Automatic Authorize, Manual Capture because it doesn’t allow you to store the CVV2 number (the number on the back of credit cards), which is a valuable fraud prevention tool.
If your store is set to Authorize and Capture at Shipping, the Payment Log appears empty. Use the Receive button in the Payments and Credits section to execute your initial payment command.
If using the Authorize option, the Payment Log appears as it does for the Automatic Authorize, Manual Capture setting. If using the Debit option, it appears as it does for Automatic Authorize and Capture setting.
Unsuccessful orders for all three gateway settings, appear in the Payment Log with Declined listed under Payment Type.
In this case, no further action is possible from the Payment Log. The customer must place a new order, or you must initiate a new payment attempt from the Payments and Credits section.
With your Volusion store, there are two different forms of batches:
- The Gateway Batch - A collection of captured transactions that are submitted to your bank for processing all at once.
- Volusion Batches - Batch processing the capture function.
To choose Volusion Batches, adjust your settings like so:
- Navigate to Orders > Process Orders.
- Use the Add to Batch column to group transactions together and click Save.
- After executing the command, the Volusion Batch number appears to the left of each transaction it contains, along with an X icon.
- Select the desired Volusion Batch from the Batch Order Processing drop-down menu.
- Choose Collect Payment from the second drop-down menu, and click Go.