Authorization and Electronic Data Capture
Once the electronic capturing of or obtainment of the data from the card takes place, an electronic imprint of the card number, expiration date, and counterfeit detection value are passed to Global Payments for authorization. Global then electronically routes the electronic data from the card to the card issuer. The card issuer checks the cardholder account status, and the requested authorization amount is compared to the cardholder’s available spending limit and reviewed with fraud protection tools. If the card is approved, the issuer posts the approved amount against the cardholder’s credit line and the card issuer provides the authorization approval. At this point, the authorization response is returned by the card issuer to the merchant and routed through Global Payments, the processor.
Funding
The process of moving the funds from the cardholder’s account to the merchant’s account is called funding. During funding, the issuing bank credits the merchant’s account with the amount of the transaction. The merchant deposits the transaction receipt with the merchant’s bank. The draft is routed to the cardholder’s issuing bank, which debits the cardholder’s account and sends the cardholder’s monthly
statement for payment.
Settlement
The process of moving the transaction information from your business to the cardholder's financial institution is called settlement. Visa and MasterCard maintain authorization and settlement networks for bankcard processing and charge a fee for their use. This is the transaction percentage, and is the foundation for your discount rate. Remember that your deposit account is not just for deposits! Global Payments will subtract each month's accumulated discount fees from your deposit account. If you are using Global's Electronic Data Capture (EDC) for settlement, the settlement charges will also be subtracted. Occasionally, a cardholder will have a question about a sales draft that has already been deposited in your account. In that case, Global Payments may debit your account for the amount of the sale until the customer's question is resolved. This is called a chargeback and is described in more detail later in this guide.
Retention of Sales Drafts
In order to properly address chargeback issues, merchants must retain signed copies of sales drafts bearing cardholder signature to address cardholder inquiries and requests for copies. Global Payments requires retention for 18 months of your MasterCard and Visa transactions. Retention of the original draft, or a legible copy can be stored for 18 months from the date you were paid for the transaction. Stored sales drafts and other transaction data should be safeguarded with limited access. Merchant must keep all systems and media containing cardholder, account or transaction information (whether physical or electronic) in a restricted, secure manner so as to prevent access by or disclosure to any unauthorized party. At the end of the 18 month retention period, transaction data such as sales drafts, reports, and other media with cardholder account data must be rendered unreadable prior to being discarded. If you have PC access to transaction information, then you must not dispose of the PC until information has been rendered unreadable or has been shredded. You should always keep complete records for all credit card transactions for chargeback requests. Do not store sales drafts in alphabetical order by customer. The cardholder name is not part of the retrieval request record. We recommend using a storage system that is sorted chronologically by date, and then by cardholder account number.
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