After a credit card transaction has been authorized by the issuing bank by sending an authorization code to the merchant, the settlement stage of the process begins. This is called batch processing because a number (or batch) of transactions is settled all at one time.
The batch can be settled at any time throughout the day, but since credit card processors charge a fee each time it’s done, it’s more cost effective and less confusing to settle all transactions simultaneously.
How the Batch is Processed
Throughout the business day, all the credit card authorization codes received by a business are compiled in a data file on its credit card terminals, processing software and/or electronic payment gateway. The codes are then uploaded and processed simultaneously, typically at the end of the day.
Settling, or closing, the batch requires the merchant to transmit all the authorization codes to the credit card processor for sorting and forwarding to the issuing banks, who have already placed a hold on the cardholder’s line of credit or account funds to cover the transaction amount. At settlement, the banks release those funds to the processor who, in turn, deposits them into the merchant’s account, usually within 48 hours of the transaction. The issuing bank bills the purchase on the cardholder’s next statement.
TransFirst® Batch Processing
TransFirst offers an auto-batch close service that automatically settles merchants’ transactions at the same time every day. Batch processing for automated recurring billing — including monthly subscription or membership fees — is a convenient option that can be set up by uploading a file containing customers’ transaction information for billing.
It’s important to note that if there are no transactions pending when it’s time to close the batch, the process does not take place and no batch fee is charged.
Batch Processing with Transaction Express®
Batch processing through Transaction Express, TransFirst’s customizable electronic payment gateway, requires no special equipment or software. Transaction Express processes credit card transactions in real time via an Internet connection. Fully PCI compliant, it supports fraud prevention tools like AVS, CVV, CVC and CID to help keep you and your customers protected from data breach and identity theft.
Trained TransFirst representatives can help you select the processing solutions that meet your unique business requirements, and they can provide more information about batch processing, merchant accounts and the products and services that we offer. Contact them by completing the form at the top of this page or calling the toll-free number listed.