The first step of processing credit card transactions involves checking with the customer's bank to verify the customer's card is legitimate and has the available funds to pay for your product or service. If the cardholder's bank determines there is an issue, the transaction is declined. If the cardholder's bank approves the transaction, the card is authorized. This puts a hold on the funds, meaning the customer isn't able to spend that money, but it doesn't take any funds out yet.
The transaction will finalize during the capture phase. This is where a customer can add a tip to their payment if your business lends itself to this process. All transactions for a trading day will resolve and capture at a specific settlement time set at account creation. Once transactions capture they will then batch out through our payments gateway. The final step after we receive the days batch is to then send the transfer of these funds to your bank account excluding processing fees. All transfers are sent through the ACH banking process that happens once daily.