Batch Processing Example
Say you’re the manager of a restaurant. You've gotten your dining rooms up and running; business is booming once more, with hundreds of people coming and going each day.
When a customer is ready for the bill, they offer their credit or debit card for payment. The server takes the customer's card, and swipes, taps, or inserts it, then returns it in the folio along with their receipt and a pen to sign with.
Meanwhile, the customer’s payment information is sent to an acquiring bank. If verified as legitimate and having sufficient funds, then it will be noted either via electronic file updates or manually on paper statements received every month from your issuing provider.
Authorization codes are stored in one place until a batch process is completed for all necessary transactions, including those made online and in a physical store. The transaction is not charged to the bank until after the batch process, which occurs when the purchase is authorized on the customer’s credit card at the time of purchase.
After that, you’ll generally process your batch of transactions later in the day. Banks typically charge a fee for each group of credit cards processed, so many merchants choose to only do batch credit card processing once a day to save money.