How Your Funds Are Transferred From Your Merchant Account to Your Pocket

You will find a number of different techniques on the market today for merchant's to easily accept payments from their customers. Whether they are credit card or debit card transactions, with today's practical solutions a merchant can literally process their transactions anywhere and at any time by using one method or another. There are a wide variety of solutions. There are physical payment processing terminals that use card swipe and chip and PIN insert that require ethernet or telephone line connections. There are credit card machines that accept credit cards that run on a wireless network much like a cell phone, these are often referred to as, GPRS payment processing terminals. There are also e-commerce solutions and over-the-phone products that are all created to ensure that merchants are paid securely by their customers in an effort to protect both parties involved in the transaction.

At the end of every day, and once the merchant has closed their batch, their funds need to be deposited into a merchant account.

We're not going to bore you by getting to technical. The digitalization of funds and how they materialize into your account is a company specific process.

When it comes to the physical connection and fundamental function, all of the merchant solution (credit card machine, wireless payment terminal, and e-commerce) are able to function because of their connection to a bigger network of companies who're processing intricacies from the deposits. So to start, the payment processing solution needs a way to "call out".

Every payment processing company works together with a host or provider company on the technical side. This 3rd party host is important because they process the information received from the credit card machine, and then they turn the data into a processing file at which point they deliver it to the Central Bank of Canada.

Once the merchant has completed a full day, they will normally run a "close batch". which initializes the process of depositing all the transactions to their account. As soon as the "close batch" is completed by the credit card machine, the third party host company or processor transmits the processing file to the Central Bank of Canada. Then the merchant's bank branch searches for that processing file at Central Bank so they can finish depositing the money into the correct account. The merchant's bank receives the information and processes the file and puts "the money in your pocket"! This system of data processing is initiated by the information that the credit card machine machine is processing, converted by the third party provider, and finally completed by the merchant's home branch.

This process is incredibly safe and secure. Each step in the process is encrypted, encoded and merchant specific and more importantly its traceable! This system has been engineered to stand up to the highest security risks and it is guaranteed to be safe for any merchant to use with confidence. The idea of digital money has existed for years,  but it is still incredible to examine and to know how the money can be broken down into 1's and 0's and put back together again at another end to become tangible.