How does the credit card work

If a caveman came back and made his way to a store
offering Point of Sale (PoS) payment mode, he would be
baffled by the ease at which Homo sapiens do their own
version of hunting.

In truth, the simple act of swapping a small card into
a terminal to effect a transaction would bewilder the
uninitiated, and not necessary the early man.

What happens?

How the payment is finally processed?

These are just some of the questions that even some
card holders don't bother to ask, either to themselves
or anyone (it is a possibility that some store workers
don't fully understand it as well), so you are not
alone.

Here are some quick hints.

Every time one uses a credit card to purchase
something, several industry players offering different
services then come forward to complete the
transaction.

Once the card is swiped across a PoS terminal, the
terminal electronically reads the cards holder
information and then through a phone line, it asks for
an authorization to complete the transaction from the
processing network which is responsible for
translating the information given at the PoS sale
point.

The data is then sent to the issuing bank to check
whether the account is valid and that the transaction
is within the allowed credit limits.

The network is then triggered to send an approval code
to the PoS terminal. The details are then saved at the
PoS which are then sent to the processing bank at the
end of the day which then pays funds into the
merchant's account.