How’s is a card purchase processed at a supermarket?

Question

When I use a debit card at a supermarket, how is the money processed after I use my card?

In: 2

Answer 1

Assuming by debit you mean visa/MasterCard/etc, the PoS terminal (thing on the counter) contacts the merchant’s (supermarket’s) payment processor which is typically their bank.

The payment processor then uses the appropriate card network (e.g. Visa) to contact the cardholder’s bank/issuer with an authorisation request. The issuer then checks that the amount is ok, runs any anti fraud checks, etc and sends back an authorisation confirmation.

At this point no money has changed hands, that will happen later at a process called “settlement” where the various banks, issuers, payment processors, etc come together and sort out who owes who what. However, typically your card company will immediately deduct or at least hold the money from your account.