What Happens When You Use A Credit Card Today?

By Sean Berg, Shift4

The business technology ecosystem has evolved over the years, and most resellers have focused their attention on the latest and greatest emerging technologies. As such, payments technology has faded into the background as if it were just a feature of the average business platform. Many resellers did not notice as layer after layer of services were added, and when looking back, it is hard to tell where the payment begins and ends. Payments processing has remained the same but looks complicated in recent years as additional layers, such as payment gateways and cloud-based technology, have been added to the payments process. Understanding each of these layers allows resellers to emphasize the added value at every step.

How Have Payments Evolved Over the Years?
When credit cards were first introduced as a replacement for cash, it created a powerful IOU system among consumers, card companies, and banks. It was simple, but effective: card brands regulating a payment network among three different types of banks — the merchant bank (bank for the business), the issuing bank (bank for the consumer/credit card holder), and the acquiring bank (the bank transitioning money between all parties). This offered cardholders additional buying power as they were not limited by cash on hand. This generated a significant increase in revenue for business owners, causing this capability to be rapidly embraced, becoming commonplace today.