Having various financial instruments has long been helpful; which allow you to acquire goods and services, paying them in comfortable installments. In addition to being easy and simple, however, it does not imply that it is not secure, as is the case with a credit card transaction .
Since in the case of executing a transaction with a credit card, you are going to require the bank to grant the merchant or establishment an authorization code; This will be the means that will allow the purchase or payment to be made, and in this case the bank will approve or not the process to debit the funds.
How does the authorization code work?
Basically, when you have a credit card, you have a limit established by the financial institution, which in no case can you exceed; In this sense, when you use and have sufficient funds, the bank will send the code that normally has between 5 and 6 digits; which is attached to the receipt.
On the other hand, this is also done for prevention, and in the event of fraud or fraud, the financial institution will not authorize the transaction. What generates confidence, both to the holder and to the business or establishment, if you have doubts, consult the bank for more information about credit cards .
It is relevant to mention that this entire process is immediate and occurs almost automatically. Which means that in case of not having sufficient funds or being a scam, the money will not be debited, providing immediate security to the parties involved.
Keep in mind that by having this type of financial or credit instruments, we acquire duties and rights with the financial entity that grants it; that is, you will have to comply with a series of rules and guidelines, if you do not have a credit card you can request it quickly and safely .
Finally, with this globalized world, for merchants the authorization code of a transaction carried out with a credit card has minimized fraud; Due to the fact that with the payment systems that are faster every day, they are also reliable and avoid or eliminate errors.
What is the credit card transaction process?
Because the use of any financial instrument involves a series of steps , which undoubtedly have to be carried out in a correlative or progressive manner; And although as an alternative you can pay with PayPal without a credit card, below I will detail how the system works so that you can buy or cancel a service.
Step 1: Authenticate
The financial institution verifies or verifies the validity of the financial instrument or in this case of the credit card; This also occurs when using tools created for protection such as the Address Verification Service (AVS) .
It will also perform the authentication using the security codes of the credit card; among them are CVV, CVV2, CVC2 and CID . In this sense, it will verify that all the data are correct and are as indicated by the financial instrument provided by the bank.
Step 2: Authorize
In principle, the client or owner of the financial instrument goes through a point of sale or POS, where all the data is sent automatically to the acquiring bank; either by phone line or internet, later to be forwarded to the credit card network.
Upon arriving here, the network deletes the payment, and requests authorization to cancel the debt from the issuing bank; In this case, before authorizing, the entity must have the following information: amount, security code, number, expiration date and billing address.
It is possible that the process is very simple; However, behind it is a whole platform elaborated in such a way as to minimize errors and fraud ; building trust in the credit system for your safety.
Keep in mind that it is also essential to maintain an impeccable credit record , and that you achieve it by paying on time, which surely allows you in the future to increase the limits for credit, so if you want to request an increase in the credit limit of your card it is necessary that follow some steps.