Payment transaction: stages, actors and possible paths

When you buy online or pay for a purchase in store, everything seems to happen in a second. However, behind this simple gesture lies a veritable technical ballet. Several actors are involved, each playing a specific role in making information travel, verifying security and transferring funds.
Understanding this journey not only allows you to better control your payments, but also to identify the bottlenecks that can impact your sales.

The key players in a transaction

Each payment brings together several stakeholders:

• The customer : he initiates the payment with his bank card, electronic wallet or another means.
• The merchant or e-merchant : he collects the payment via his site, his TPE or a secure link.
• The PSP (Payment Service Provider) : it provides the technical infrastructure that connects the merchant to the banking network.
• The acquiring bank : it receives the request on behalf of the merchant and transmits it to the payment networks and then credits the merchant's account when the transaction is accepted.
• Card networks (CB, Visa, Mastercard...): they forward the request to the issuing bank.
• The issuing bank : she holds the customer's account and decides whether or not to authorize the payment.
• Complementary tools : anti-fraud solution, payment orchestrator, 3D Secure authentication...

The steps of a transaction, from click to settlement

1. Initiation
   The customer validates their payment online, via a payment terminal in store or a secure link.
2. Transmission to the PSP
   The PSP collects payment data and sends it to the acquiring bank.
3. Routing to the network
   The acquiring bank transmits the request to the card network concerned (Visa, Mastercard, etc.).
4. Verification by the issuing bank
   It checks the validity of the payment method, the availability of funds and, if necessary, triggers strong authentication (3D Secure, SMS code, biometrics).
5. Answer
   The issuing bank returns an agreement or refusal, transmitted in cascade to the merchant via the network, the acquiring bank and the PSP.
6. Confirmation to the customer
   The site or terminal displays the payment result. If the payment is accepted, the merchant can capture the funds immediately or postpone this step.
7. Compensation and settlement
   The funds are effectively transferred from the customer's account to the merchant's account. Depending on banking conditions, this usually takes from D+1 to D+3.

The different possible paths

Not all transactions follow exactly the same path.

• Without authentication : fast but now rare online, except for some recurring payments or small amounts.
• With strong authentication (3D Secure) : reinforces security and fights against fraud.
• With advanced anti-fraud : the payment is evaluated by a scoring engine before being transmitted.
• Multi-PSP orchestration : the transaction is routed to the service provider offering the best acceptance rate.
• Smart re-routing : in case of refusal, the payment is automatically retried via another PSP to save the sale.

Why understanding these steps is strategic for an e-merchant

Each link in the payment chain is an opportunity... or a risk. A poorly configured PSP, an excessively intrusive 3D Secure or a poorly calibrated anti-fraud system can generate unjustified refusals and cause your sales to fall.
By understanding the complete journey, you can:

• Identify where payments are failing.
• Optimize the success rate.
• Improving the customer experience.
• Reduce fraud without degrading conversion

With a payment orchestrator like Purse, you keep control of each stage to maximize your performance.

sourcing

• Bank of France — Understanding card payments — 2023 — Read
• Visa — How Payments Work — 2024 — Read
• European Payments Council — Payment Transaction Lifecycle — 2024 — Read