[nycphp-talk] [OT] & banks.

Hans Zaunere lists at
Sun Sep 23 12:40:11 EDT 2007

Ben Sgro (ProjectSkyLine) wrote on Monday, September 24, 2007 12:20 AM:
> Hello Keith,
> Good points. From the online info, my understanding is
> that:
> #9 The Credit Card Interchange System passes the appropriate funds
> for the transaction to the Acquiring Bank.
> I guess I'm not clear on who that is, and how to set that up. I know
> my client has a merchant
> account with Soveirgn Bank. My client is a 35 year old business, so
> I'm sure they have
> good rates.
> So we want to transfer the funds to Soveirgn when the CC
> charge is completed.

This is always a brilliantly confusing topic, but as I understand it...

-- you have a business checking account (let's say with Soveirgn)

-- you get a merchant account (with your bank like Soveirgn, or somewhere

-- your merchant account generally picks the gateway (like to

There might be some more options, but typically the gateway (
doesn't do much with the money.  They just authorize the card and do the
capture.  If things are kosher, then they tell your merchant account to
initiate the transfer from the user's card to your merchant account.  Once
things settle at the end of the day, it gets transferred to your business
checking account.  Generally the best bet that I've seen is to talk to your
bank (the one where you can write checks from).  They typically will provide
merchant services, and generally have the better rates.  Going through
third-parties and smaller middleman can be troublesome.

I just had a meeting the other night with a couple guys who wrote their own
gateway (like  The number of middle-men was astonishing.
Someone like doesn't actually talk to the credit card
companies... they need to talk to another layer of networks.  It's not until
another apparent two to three layers of network, that finally the credit
card companies themselves get hit.  Mix in the different types of credit
cards, international banks, and the required support of course for standard
POS terminals, it's amazing it works quite frankly.


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