Accepting Card Payments

How Do Credit and Debit Cards Work?

Credit and debit cards remain one of Americans’ favorite forms of payment, both at the physical point of sale (POS) and for online card-not-present (CNP) payments. In addition to transactions where cards are the primary form of payment, they also serve as a behind-the-scenes money movement method for alternative payment types such as digital wallets.

Card payments rely on a series of players to move money from the cardholder’s account to the merchant from whom they make a purchase:

• Cardholder - The cardholder is the person or business who has the card and presents it to pay for goods or services.

• Card Issuer - The card issuer is the financial institution that provides the card for their accountholder to use. When the account holder uses the card to buy something, the issuing financial institution is the party that will approve or decline the transaction. Regional and community financial institutions also rely on an issuer processor to manage the complex processes of authorization, clearing, settlement, and fraud monitoring of card transactions.

• Merchant - The merchant is the business or organization that accepts the card for payment. When a cardholder uses their card at a physical point of sale; the cardholder uses the merchant’s terminal to complete the purchase by inserting or tapping their card.

• Gateways and Processors - Processors are the transaction handlers that submit card transactions directly to VISA, MasterCard®, or another card network. Merchants must have an account with a processor and be connected into their network to accept cards for payment. Merchants often connect to their processor through a gateway, which simplifies the connection process and provides additional services and convenience for the merchant.

• Card Brands - The card brands (VISA, Mastercard®, etc.) are payment networks that set the rules by which card transactions are governed. They are the ultimate arbiter between the cardholder, merchant, and issuing financial institution.

How Does Our Solution Help Businesses and Organizations Accept Card Payments?

Our solution helps merchants accept card-not-present transactions by sending information through our APIs. Our solution connects to the merchant’s gateway or processor to complete the payment process. Merchants can access our solution through their financial institution or reseller.

When a merchant submits a card transaction through our APIs, we immediately send it to the merchant’s gateway or processor for approval. Approved transactions flow through the parties described above, resulting in a credit to the merchant’s account at their financial institution. Declined transactions are rejected. In either case, our solution sends a response through our API to convey the status of the transaction.

Although most merchants will have access to transaction information through their gateway or processor, they can also access information or research prior transaction events by sending requests through our reporting API or by accessing our solution’s JHA SmartPay Business™ interface.

A variety of reasons (including downstream processing issues, cardholder disputes, or other events) can cause the status of a card transaction to change. In many cases, our solution will reflect the updated status of the transaction in our reports. Real-time notifications of status changes are also available through our push API option, JHA SmartWatch™.

Merchant Account Responsibilities

Each business or organization must establish a relationship with a gateway or processor before it can leverage our solution to capture and submit credit and debit card transactions. This relationship is necessary for them to participate in the card processing networks.

When a merchant establishes this relationship, they are given a “tear sheet” containing information that is necessary for other systems that will capture card transactions on their behalf. Merchants must be able to provide this information to be boarded on our solution.

Options for Storing Receiver Information

Keeping up with detailed information about transaction recipients can be cumbersome. There are also privacy issues involved, and these can make protecting a Receiver's customer and account information time-consuming and expensive. If you also use our platform to accept credit or debit cards, Payment Card Industry Data Security Standard (PCI DSS) requirements can compound your cost and commitment. Our solution can help simplify this task.

Our solution offers two APIs for card payments: The SmartPay Transaction Processing API and the SmartPay Payment Vault API. If your organization plans to maintain Receiver information in your system's databases, you should use the SmartPay Transaction Processing API. With Transaction Processing, you will include the Receiver's information with each payment you submit. If you would like us to store the Receiver information in our secure database on your behalf, you should use the SmartPay Payment Vault API. With Payment Vault, you will send us information about a Receiver one time, after which you can delete any sensitive information instead of storing it. Our system will return any identifying number assigned to that Receiver. Each time you need to send a transaction to that Receiver's account, simply send us the identifying number and we'll take it from there. You can update Receiver information as often as you need to. Payment Vault can be a secure and efficient way to maintain Receiver information while eliminating many risk and compliance issues.

Other Tools and Resources

We offer a collection of tools and resources to assist integrators and their merchants.

• Gateway and Processor Relationship Assistance - If desired, our solution partners with a provider who can assist merchants with establishing a gateway or processor relationship. This service can be offered by financial institutions or resellers to simplify the boarding process for merchants who are new to accepting card payments.

• Single Sign-On (SSO) to SmartPay Business - The SSO interface for SmartPay Business allows financial institutions or resellers to seamlessly redirect merchant users from their solution to our SmartPay Business site where they can review activity, run reports, research prior events, and manage transaction information.