Ever wonder what actually happened when your credit card is swiped on the electronic data capture (EDC) terminal at the merchant’s place?
In order to protect yourself from credit card fraud, it is essential that you know some background of how a credit card purchase transaction works. When equipped with such knowledge, you will be able to tell whether a merchant has acted suspiciously when processing your credit card at their terminal.
The EDC terminal at the merchant’s place is powered by batteries or a cable linked to a power supply point. The terminal is connected to the acquiring bank through a telephone line.
When the merchant swiped your credit card and input the purchase details into the EDC terminal, the terminal would compile and encrypt the information before transmitting to the acquiring bank though the telephone line.
When the acquiring bank receives the purchase transaction from the terminal, it will decrypt and analyze it. During this stage, the acquiring bank will do two things. First it will authentic the transaction with some security checks. After the transaction cleared authentication checks, the acquiring bank will perform credit worthiness checks on the credit cardholder’s account.
If the transaction did not pass any of the said checks, the system will automatically send a declined transaction message back to the EDC terminal. However if the transaction passes all the security and credit worthiness checks, an approved transaction message will be sent to the terminal.
In the event that the merchant received a declined transaction message, they would politely return the credit card and inform the holder on the declined decision. The merchant will ask for other form of payment means.
If an approved transaction message is received, the EDC terminal will automatically print a sales slip. The merchant will obtain your signature on it as a proof of payment for the goods or services rendered to you.
When the purchase transaction is performed orderly without any interruption, there is no reason for the merchant to perform a second swipe at the EDC terminal. However in the event that there are some problems during the processing of the purchase transaction such as time-out or unable to connect with the acquiring bank, the merchant may do a second card swiped at the EDC terminal.
Never sign twice on 2 different sales slips for the same purchase. If there was an error on the first sales slip, ensure that the merchant destroys it. The merchant should perform a refund electronically though the EDC terminal. If electronic refund cannot be done, ensure that you can get a manual Credit Slip from the merchant as an alternative. This will be a great supporting document in the event there is a dispute over the duplicate transaction.
Get more tips on credit cards processing at Cardexpert Blog.