There are many steps behind the scenes to deliver your customer's payment to your bank account.
What Is Payment Processing?
Payment processing is the system that handles transactions when a customer makes a purchase using a credit/debit card, digital payment method, or bank transfer payment. For businesses, it’s the behind-the-scenes infrastructure that ensures they receive the funds from their customers’ payments.
Step-by-Step: How Payment Processing Works for a business
1. Customer Checkout
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The customer initiates a payment online or in-person using a credit/debit card, a digital wallet (e.g., Apple Pay, Google Pay), or a bank transfer payment.
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The merchant (you) have used an Autobooks payment tool to collect that payment. Autobooks is integrated with a payment gateway.
2. Payment is encrypted and sent through a Payment Gateway
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This is the tool that encrypts and transmits the customer’s payment data securely.
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It acts as the front-line interface between you and the payment ecosystem.
3. Payment is routed through a Payment Processor
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The processor routes the transaction from the payment gateway to the card network (Visa, Mastercard, Amex, or your customer's bank).
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It checks with the customer’s issuing bank (the bank that provides the payment method for the customer to use) to confirm:
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Funds are available
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The card or bank account is valid
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The transaction is not fraudulent
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4. Customer's card or bank issues an Authorization
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The issuing bank sends an approval or decline message back through the chain:
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Card network → Payment processor → Payment gateway → Merchant
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If approved, you can complete the sale. If denied, the payment method will be declined. When this happens within Autobooks, we will ask the customer to use a different payment method and try again.
5. Payment Settlement & Funding
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At the end of the business day, the merchant’s system (Autobooks) sends a settlement request to the Payment Processor.
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The Payment Processor pulls funds from the customer’s bank (or the charge will appear on the customer's card) and deposits them into the merchant’s bank account (usually within 1–3 business days).
All payments on a given day from your customers will begin processing at the same time of day with a batch of payments as described in Step 5 above. When your customer triggers a payment to you (by tapping their card, completing your payment form, or responding to an invoice), their payment will begin the settlement process after 6pm ET.
Any payments triggered after 6pm ET will be placed in a batch the following business day.
Typically, you will see payments settle to your bank account within 1-3 business days. The exact timeframe depends on the Payment Processor (not Autobooks).