Credit & Debit Card Processing

Paperless Transaction Corporation’s core service is the authorization, clearing and settlement of financial transactions. This includes a robust credit and debit card processing service that provides a PCI-compliant, single-source solution compatible with a wide range of software and data management systems. Supported by a secure, tier 1 data hosting facility, PTC’s authorization network accepts Visa, MasterCard, Discover and American Express – as well as various national and regional debit cards – and delivers a versatile and efficient donation processing solution.

The History of Credit Cards

Early “Charge” Cards

Early “proto”-credit cards—made of cardboard, paper, or celluloid—were mainly used to build customer loyalty at the specific companies that issued the cards. There were many caveats to these cards as well, including a limit on the location where they could be used, a customer needed to have an account at the bank which the merchant used to utilize the credit, and they were only valid in the stores which issued the cards. These cards are widely seen as precursors to modern credit cards.

The First Credit Card

Fast forward just a few short years later in 1949, which is seen as the birth of the traditional credit card. Frank McNamara, as the story goes, found himself in a relatable, if embarrassing predicament one night during a business dinner at New York’s Cabin Grill: he had forgotten his wallet. His wife came to the rescue and paid the bill, but this experience led him to invent a new way of making purchases. With the help of his partner and friend Ralph Schneider, he created the Diners Club card, which is now seen as the first widespread “credit” card.

Credit Evolving

Eventually, the first credit card that could be used for a wider range of purchases—called the BankAmericard—began to be issued state-by-state by Bank of America in California. In the early 1960s, the credit card industry felt a seismic shift. Many competing banks that began to issue credit cards of their own realized that if the credit card were to be accepted on a much larger scale, they needed to persuade merchants to accept more than one major card. An alliance of banks banded together to form the InterBank Card Association (ICA), which we now know as MasterCard. And in the next decade, BankAmericard separated from Bank of America entirely and became Visa.

The Turning Point

Credit card transactions in the 70’s and 80’s were recorded on carbon paper sales drafts that were later deposited at the bank. All this changed as the US ushered in the age of electronics. In the mid 1980s it became possible to send information over a telephone line to a central computer and receive a response back within seconds through the invention of modems and simple point-of-sale equipment. The computer housed all of the negative records of credit card accounts. When queried, the computer would respond with approved or declined. This changed the way credit cards were approved before the purchase, and resulted in faster checkouts for the merchant, more secure transactions for the banks, less inconvenience for the customer. This process became known as Electronic Draft Capture.

How Our Processing Works

To many people, the process behind credit card processing is a mystery, but it is relatively simple. At the macro level, there are 2 sides of the credit card industry: the card issuing side merchant acquiring side. Both are required for the industry to exist.

The card issuing side is limited to banks issuing cards to individuals the bank deems credit worthy. The merchant acquiring side of the credit card industry refers to various places of business that cardholders can use their cards to conduct commerce. Whether it be in traditional retail, restaurants, online shopping, gas stations, non-profit charitable organizations, churches, etc., merchants are places of business that wish to accept cards as a form of payment.

When merchants accept cards as a form of payment, the transaction goes through three basic steps: 1) authorization, 2) clearing and 3) settlement. During these steps, information is exchanged between the parties involved to ensure that the transaction is paid for accurately. Our secure payment gateway and back office virtual terminal facilitates this process so that your non-profit or church can receive donations quickly and easily!