Batch Processing

Batch Processing refers to the system used by payment processors to collect and submit a group of transactions for processing at the same time. This approach is more efficient than processing each transaction individually and is a standard part of the electronic payment cycle.

When a merchant makes a sale, the transaction details are stored in a batch file within their payment terminal or point-of-sale system. At a designated time — usually at the end of the business day — the batch of accumulated transactions is submitted to the payment processor for settlement.

The processor then coordinates with the card networks and issuing banks to facilitate the movement of funds from customers’ accounts to the merchant’s account.