Process Flow Comparison: How VISA Works When Swiping a Credit Card at a Merchant’s Shop VS Digital Wallet
ByteByteGo | Alex Wu | Jul 16, 2022
What happens when you swipe your credit card at a merchant’s shop
VISA, Mastercard, and American Express act as card networks for clearing and settling funds. The card acquiring bank and the card issuing bank can be – and often are – different. If banks were to settle transactions one by one without an intermediary, each bank would have to settle the transactions with all the other banks. This is quite inefficient.
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To understand the process involved, we need to divide the “scan to pay” process into two sub-processes:
- Merchant generates a QR code and displays it on the screen
- Consumer scans the QR code and pays
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