Small Business Guide
What is payment processing?
When a customer pays by card, a lot happens in the two seconds before it says “approved.” Payment processing is that whole journey: from the tap to the money landing in your bank account. Here it is in plain language.
How a card payment moves
- 1
The customer pays
They tap, insert, swipe, or enter a card at your terminal, online checkout, or pay-by-text link.
- 2
The processor sends it on
Your payment processor routes the transaction to the right card network (Visa, Mastercard, and the rest).
- 3
The bank approves it
The network asks the customer’s bank to approve the charge and confirm the funds are there. This happens in a second or two.
- 4
The money lands
The approved funds are batched and deposited into your business bank account, usually the next business day.
Every step carries a cost, but the only part you actually shop is the processor and its markup. Want the money side? How processing fees work.
What you need to accept cards
- A way to take the card: a payment terminal, a reader, or an online checkout.
- A processor to move the transaction and settle the funds.
- A merchant account so approved funds can settle to your business.
Common questions
What is payment processing?
Payment processing is everything that happens between a customer paying with a card and the money landing in your bank account. A payment processor moves the transaction between the card networks and the banks, gets it approved, and settles the funds to you.
What is a payment processor?
A payment processor is the company that handles the movement of a card transaction: routing it to the networks, getting the approval, and depositing the funds. Your terminal or POS connects to a processor behind the scenes.
What is a merchant account?
A merchant account is a type of bank account that lets your business accept card payments. Approved card funds settle there before moving to your regular business checking. Getting one involves underwriting, which is a review of your business.
Why does any of this matter to me?
Because every step has a cost, and the only part you control is which processor you use and what they charge. Understanding the flow helps you read a quote, compare providers, and avoid junk fees.
Ready to take payments the right way?
A Norvet specialist will set you up with the right equipment and a fair, transparent rate. Free, no obligation.