Understanding batch payment processing

What is batch payment processing?

Batch card processing, also known as batch out,is where the merchant processes all of its pending payments at a time agreed with the account provider, ordinally at the close of business. Each individual customer bank then pays the balance to the merchant in what’s referred to as ‘settlement’ which can take up to a few days.

Which industries use credit card payment batch processing?

Batch processing credit card transactions are normally used within mail order companies or businesses who have high volumes of payments. The reason they do so, is because no user interaction is needed once the batch processing is underway. Batch card processing differs from induvial processing which requires user interaction from start to finish. Batch out credit card processing can also save on transaction fees due to processing in one lump opposed to paying out for each and every transaction throughout the day.

How does batch credit card processing work?

Debit and creditcard batch processing works by compiling the customer payment information and authorisation securely, until the batch out takes place. A file is created for each transaction. This data can be stored in one of three ways, using batch credit card processing software, a payment gateway suitable for batch payments or the card terminal itself. The file is then later sent, along with authorisation codes, to the credit card processing company known as the acquiring bank.

From batch out to settlement tends to take 48 hours, as the banks communicate between themselves taking the money from the customers bank and therefore processing payment. From the customers point of view, there is no difference between batch card processing and a standard transaction.

What are the batch fees when credit card processing in large amounts?

Most merchants choose to process their batch payments in one go, the reason behind this is that card processors charge a fee per batch. This fee varies from provider to provider, the amount you are processing, the type of batch processing payment gateway required and the currencies needed. Speak to our experts today for a tailored quotation.


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