1- Merchant Bank
The brick-and-mortar retailer is able to accept credit cards because he or she has a merchant bank account. All retailers’ credit card transactions will go through the merchant bank, which will usually provide the store a small credit card terminal. The credit card terminal is the small, calculator-sized machine that a store clerk uses to read your card number.

2- How Credit Cards are Processed
The credit card terminal sends the credit card information to the merchant bank’s processor. The processor then uses the appropriate credit card network, such as MasterCard or Visa, to validate the credit card information. They check the credit card at the customer’s bank to validate the card number and see if there is enough credit to cover the purchase.
Once the merchant bank’s processor receives the result from the customer’s bank, they send it to the terminal in the store. The cashier will see the confirmation or denial and take the appropriate action.

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