# Payments
Source: https://paymentsandrisk.com/docs/payments
Last updated 24 October 2026.
TL;DR
- How card transactions actually work, from swipe to deposit
- Authorization asks "can this card pay?". Capture commits to it. Settlement is when money actually moves, one to three days later
- Treat every control on these pages as a test. Start small, measure, then roll out
- Looking for one answer? The Quick Answer table below routes you straight there
15 min read
You're either working out why a transaction failed, or where your money went. Both start here.
## Quick Answer
| Looking for... | Go here |
| --- | --- |
| **Which processor should I use?** | [Processor Comparison](https://paymentsandrisk.com/docs/payments/processor-comparison/) |
| **How much will processing cost?** | [Total Cost Model](https://paymentsandrisk.com/docs/payments/total-cost-model/) |
| **Why are transactions failing?** | [Auth Optimization](https://paymentsandrisk.com/docs/payments/auth-optimization/) |
| **How does settlement work?** | [Settlement](https://paymentsandrisk.com/docs/payments/settlement/) |
| **What payment methods should I accept?** | [Payment Methods](https://paymentsandrisk.com/docs/payments/payment-methods/) |
| **Understanding my statement** | [Reading Statements](https://paymentsandrisk.com/docs/operations/reading-statements/) |
| **Am I making a costly setup mistake?** | [First-week checklist](https://paymentsandrisk.com/docs/payments/#first-week-checklist) |
| **A client missed their appointment** | [Check the fee, declined card or booking payment](https://paymentsandrisk.com/docs/payments/appointment-fees/) |
| **AI orders appeared in Shopify** | [Check the channel, checkout and fees](https://paymentsandrisk.com/docs/payments/agentic-orders/) |
| **I run an online store** | [Payments for your online store](https://paymentsandrisk.com/docs/learning-pathways/by-business-type/ecommerce/) |
| **A customer paid through an app for a sale or job** | [Check the account, payment type and notice](https://paymentsandrisk.com/docs/payments/p2p-and-project-deposits/) |
* * *
## Are You Card-Present or Card-Not-Present?
_Not sure? If customers swipe/tap in person, you're CP. If they type their card online, you're CNP._
🏪
Card-Present (In-Person)
- [Terminal Decisions](https://paymentsandrisk.com/docs/payments/card-present-terminal-decisions)
- [Terminal Operations](https://paymentsandrisk.com/docs/operations/terminal-operations)
- [Card-Present Fraud](https://paymentsandrisk.com/docs/fraud/card-present-fraud)
_Lower interchange, higher liability shift_
💻
Card-Not-Present (Online)
- [Checkout Conversion](https://paymentsandrisk.com/docs/payments/checkout-conversion)
- [Auth Optimization](https://paymentsandrisk.com/docs/payments/auth-optimization)
- [Subscriptions & Recurring](https://paymentsandrisk.com/docs/payments/subscriptions-recurring)
- [A subscription renewal failed](https://paymentsandrisk.com/docs/payments/subscriptions-recurring/#your-renewal-failed-what-now)
_Higher fraud risk, more prevention options_
## Pick Your Mode
[🔧 Operator Action guides for day-to-day decisions. Start here.](https://paymentsandrisk.com/docs/payments/buying-payments)
[📊 Analyst Metrics, measurement, and optimization tactics.](https://paymentsandrisk.com/docs/payments/metrics)
[📚 Reference Lookup tables, codes, and specifications.](https://paymentsandrisk.com/docs/reference/decline-codes)
Popular
[🔄 Authorization & Capture Start Here How the money actually moves](https://paymentsandrisk.com/docs/payments/auth-and-capture)
[📈 Auth Optimization Popular Improve approval rates](https://paymentsandrisk.com/docs/payments/auth-optimization)
[💰 Settlement & Reconciliation Popular Why deposits don't match sales](https://paymentsandrisk.com/docs/payments/settlement)
[❌ Decline Codes Popular Why transactions fail](https://paymentsandrisk.com/docs/reference/decline-codes)
[🛒 Checkout Conversion Popular Stop losing sales at the finish line](https://paymentsandrisk.com/docs/payments/checkout-conversion)
* * *
If You Only Have 2 Hours This Week
1. Calculate your effective rate (total fees / total volume). Compare it with your contract, card mix and average ticket. For example, Stripe at 2.9% + $0.30 costs $3.20 on a $100 domestic order: $100 x 2.9% + $0.30. That is a 3.2% effective rate. Smaller tickets raise it; added fees raise it too.
2. Pull your top 5 decline codes from last month. Pick the most common one and read what it means.
3. Got recurring billing? Check how many customers failed payment in the last 30 days. Are you retrying intelligently?
That's it. Dashboards and optimization can wait.
Scale Matters
**Under $50K/month:** Use a simple all-in-one processor (Stripe, Square, PayPal) if it fits your business. Focus on getting paid reliably. Check published custom-pricing eligibility too; Square invites merchants above $250,000 a year to ask.
**$50K-$150K/month:** You've got a little leverage, not much. Work on [checkout conversion](https://paymentsandrisk.com/docs/payments/checkout-conversion/) first, it pays back hardest. Make sure guest checkout is smooth. Check your auth rate monthly against your own baseline. See [Benchmarks](https://paymentsandrisk.com/docs/reference/benchmarks/#authorization-rate-benchmarks) for published context. Watch that your effective rate isn't creeping up. Don't touch interchange, fraud tools or orchestration yet. At this size the money's in growing revenue, not shaving payment costs.
**$150K-$1M/month:** your effective rate matters now. Compare it to benchmarks, ask your processor about interchange-plus, and start tracking decline codes monthly. You're big enough that they'll answer.
**Over $1M/month:** Negotiate interchange-plus pricing if you haven't. Consider a dedicated payment gateway vs. all-in-one. Auth optimization becomes worth the effort.
**Need a second processor?** Compare the sales at risk from an outage with integration, reconciliation and support costs. Your channels and backup needs decide it, not a monthly volume line. See [Multi-Processor Operations](https://paymentsandrisk.com/docs/operations/multi-processor/).
### How a Transaction Flows
From checkout to cash in your bank account.
```mermaid
flowchart LR
subgraph CHECKOUT["Checkout (Seconds)"]
A[Customer
Enters Card] --> B[Payment
Gateway]
end
subgraph AUTH["Authorization (2-3 sec)"]
B --> C[Processor]
C --> D[Card Network]
D --> E[Issuing Bank]
E -->|Approve/Decline| D
D --> C
C --> B
end
subgraph SETTLE["Settlement (1-3 days)"]
B -->|Batch Close| F[Clearing]
F --> G[Interchange
Fees Deducted]
G --> H[Funds to
Your Bank]
end
style A fill:#3d5a80,color:#fff
style E fill:#5e4b8b,color:#fff
style H fill:#1f6f4a,color:#fff
```
| Phase | What Happens | Timing |
| --- | --- | --- |
| **Authorization** | "Can this card pay?" - Funds reserved | 2-3 seconds |
| **Capture** | "Charge it now" - Transaction finalized | Same day or delayed |
| **Clearing** | Networks calculate who owes what | End of day |
| **Settlement** | Money moves between banks | T+1 to T+3 |
| **Funding** | Cash hits your account | T+1 to T+3 |
**Deep dives:** [Authorization & Capture](https://paymentsandrisk.com/docs/payments/auth-and-capture/) | [Settlement](https://paymentsandrisk.com/docs/payments/settlement/) | [Money Flow](https://paymentsandrisk.com/docs/payments/settlement/money-flow/)
* * *
Planning & Budgeting
[💰 Business Model Viability Can you afford payment costs? Unit economics calculator.](https://paymentsandrisk.com/docs/payments/business-model-viability)
[📊 Total Cost Model Complete budgeting worksheet - fees, chargebacks, tools, reserves.](https://paymentsandrisk.com/docs/payments/total-cost-model)
[🛠️ Tool Stack by Tier What fraud/chargeback tools to buy at each volume tier.](https://paymentsandrisk.com/docs/payments/tool-stack)
[⚠️ First-Week Checklist Ten preventable setup mistakes to check before your first live sale.](https://paymentsandrisk.com/docs/payments/#first-week-checklist)
[📈 Scaling Milestones What changes at each volume tier as you grow.](https://paymentsandrisk.com/docs/operations/scaling-milestones)
## First-Week Checklist
Ten mistakes that cost real money, and every one is preventable. New to payments? Go through this list before your first live transaction. Been processing for months? Audit yourself against it.
1. **Your billing descriptor is recognizable.** It's what appears on your customer's card statement. "WEBSERV_PROD" or "SQ_RANDOM TEXT" instead of your business name gets you "I don't recognize this charge" disputes. Set it to the name customers know, and include a phone number if space allows. Test: would your mother recognize this on a statement? Stripe: Dashboard → Settings → Public Details → Statement Descriptor. Square sets it from your business name, so check it's correct. Shopify: Settings → Payments → Statement Descriptor. See [Descriptors and Communication](https://paymentsandrisk.com/docs/chargebacks/prevention/descriptors-and-comms/)
2. **You've priced dispute alerts against your disputes.** Ask your processor which alert networks are already wired into your account. Visa RDR and the Ethoca and Verifi feeds are often resold through the processor rather than bought direct. Get quotes for the networks it doesn't cover, and put the real number in the calculation before you decide. See [Set Up Dispute Alerts](https://paymentsandrisk.com/docs/playbooks/setup-dispute-alerts/)
3. **You haven't bought a fraud platform too early.** Below a certain volume the tool costs more than the entire problem. Start with your processor's built-ins: Stripe's Radar Lite is included with Stripe Payments, and Square's detection, CVV/AVS and velocity checks are included. Wait until confirmed fraud persists despite them. See [Tool Stack by Tier](https://paymentsandrisk.com/docs/payments/tool-stack/)
4. **You've calculated your true all-in cost.** Budgeting only for processing fees and forgetting chargebacks, tools, reserves and labor is how a business runs out of cash. Use your processor's published rate rather than a round 3%, and check its actual dispute fee. See the [Total Cost Model](https://paymentsandrisk.com/docs/payments/total-cost-model/) and [Business Model Viability](https://paymentsandrisk.com/docs/payments/business-model-viability/)
5. **You read every processor email the same day.** "Chargeback ratio monitoring", "approaching threshold", "account review", "risk department". Check your actual ratio (don't assume the email is wrong), check the warning's metric, limit and deadline, and respond to your processor within 24 hours with an action plan. See [Chargeback Ratio Crisis](https://paymentsandrisk.com/docs/chargebacks/zero-point-nine-panic/) and [MATCH/TMF List](https://paymentsandrisk.com/docs/chargebacks/match-tmf/)
6. **You're on Shopify Payments, if you're on Shopify.** Shopify charges a third-party gateway fee on every order you take through an outside processor, on top of whatever that processor charges. Check Settings → Payments shows "Shopify Payments", not Stripe or PayPal. See [the fee by plan](https://paymentsandrisk.com/docs/payments/processors/shopify-payments/#the-third-party-gateway-fee-is-the-real-story)
7. **Staff use the card reader for every in-person sale.** Keyed entry costs a higher rate on every processor that publishes one, carries more fraud risk, and gets no EMV liability shift. Train staff on day one: use the reader unless the customer doesn't have the physical card. Only key in for phone orders or missing cards, and monitor your keyed-in share weekly. See [the keyed rates by processor](https://paymentsandrisk.com/docs/payments/card-present-terminal-decisions/#motokeyed-transaction-risk)
8. **Physical goods ship with delivery confirmation.** Without delivery proof, "not received" disputes are harder to defend. Use carriers with detailed tracking, send the tracking number to the customer immediately, require a signature on high-value orders, and save the tracking data where you can find it for a dispute. For digital goods, log the download IP, timestamp and file delivered. See [Digital Goods Evidence](https://paymentsandrisk.com/docs/chargebacks/digital-goods-evidence/) and [Compelling Evidence](https://paymentsandrisk.com/docs/chargebacks/representment/compelling-evidence/)
9. **You tested 3DS on a segment before turning it on everywhere.** Turn it on for all transactions without measuring and you can lose approvals you only discover weeks later. Enable it for higher-risk transactions first as a [live test](https://paymentsandrisk.com/docs/reference/experimentation/#before-a-live-test), check auth rate after two weeks against a control group, and judge fraud and chargeback ratios only after the outcome window closes. See [First-Time 3DS Setup](https://paymentsandrisk.com/docs/playbooks/first-time-3ds-setup/)
10. **You have a backup processor relationship.** One account hold or termination can stop your business for days or weeks. Get approved with a second processor and route minimal volume through it. If the primary terminates, flip traffic immediately. See [Processor Management](https://paymentsandrisk.com/docs/operations/processor-management/) and [Money Held or Frozen](https://paymentsandrisk.com/docs/operations/holds-and-reserves/)
**Five more worth checking:**
- **Ask for better pricing earlier than you've been told.** Square's fee page says "if you process over $250,000 per year, talk to our team about custom pricing" ([source](https://squareup.com/us/en/payments/our-fees), verified 2026-08-02). See [Processor Contracts](https://paymentsandrisk.com/docs/payments/buying-payments/contracts/)
- **Investigate first, refund if warranted, don't reward abuse.** A restrictive policy backfires, though: a customer who can't get a refund goes to their bank. See [Refund Strategy](https://paymentsandrisk.com/docs/chargebacks/refund-strategy/) and [Friendly Fraud](https://paymentsandrisk.com/docs/fraud/types/friendly-fraud/)
- **Don't start in a high-risk category without the systems for it.** Sustained high ratios risk processor termination and a [MATCH listing](https://paymentsandrisk.com/docs/chargebacks/match-tmf/)
- **Turn on account updater for subscriptions.** Ask your processor whether it's included in your plan and whether it's switched on. Get the answer from support rather than assuming it's free or assuming it's running. See [Subscriptions & Recurring](https://paymentsandrisk.com/docs/payments/subscriptions-recurring/)
- **Run your unit economics before launch.** See [Business Model Viability](https://paymentsandrisk.com/docs/payments/business-model-viability/)
Count the ones you can't say yes to. Fix the high-cost, low-effort ones first: descriptor, alerts, Shopify setup. Then 3DS testing and a backup processor. First-time operators miss a few of these. That's normal. Learn and fix quickly, and re-check every time your volume steps up, because what worked at one tier breaks at the next.
* * *
Getting Started
[🔌 Gateway Basics What gateways do and when you need one.](https://paymentsandrisk.com/docs/payments/reference/gateway-basics)
[🏢 Processor Profiles Stripe vs Square vs PayPal vs Adyen - which to use.](https://paymentsandrisk.com/docs/payments/processors)
[🛍️ Buying Payments Choosing a processor, negotiating rates, avoiding contract traps.](https://paymentsandrisk.com/docs/payments/buying-payments)
[⚡ Stripe First Week Day-by-day setup after Stripe approval.](https://paymentsandrisk.com/docs/playbooks/stripe-first-week)
[▪️ Square First Week POS setup, staff training, prevent keyed-in fees.](https://paymentsandrisk.com/docs/playbooks/square-first-week)
[🛒 Shopify First Week Shopify Payments setup and optimization.](https://paymentsandrisk.com/docs/playbooks/shopify-first-week)
[📟 Card-Present Terminal Decisions Picking terminals, EMV vs contactless, keyed entry risk.](https://paymentsandrisk.com/docs/payments/card-present-terminal-decisions)
[🔒 E2EE vs P2PE Terminal encryption and PCI scope reduction.](https://paymentsandrisk.com/docs/payments/reference/e2ee-vs-p2pe)
**Optimization (when you're past $100K/month and want to improve margins)**
[📈 Auth Optimization Improving approval rates, understanding declines.](https://paymentsandrisk.com/docs/payments/auth-optimization)
[🛒 Checkout Conversion Reducing abandonment, payment form design.](https://paymentsandrisk.com/docs/payments/checkout-conversion)
[🔁 Subscriptions & Recurring Card-on-file, dunning, account updaters.](https://paymentsandrisk.com/docs/payments/subscriptions-recurring)
[📄 Invoicing Payment links, net terms, B2B workflows.](https://paymentsandrisk.com/docs/payments/invoicing)
* * *
Core Concepts
If you're new to payments, read these in order:
[1️⃣ Payment Ecosystem Who's who in payments: processors, acquirers, networks, and why it matters.](https://paymentsandrisk.com/docs/payments/payment-ecosystem)
[2️⃣ Authorization & Capture What happens in the 2 seconds after a card is swiped.](https://paymentsandrisk.com/docs/payments/auth-and-capture)
[3️⃣ Settlement & Reconciliation How money moves and who takes what cut.](https://paymentsandrisk.com/docs/payments/settlement)
[4️⃣ Payment Methods Cards vs. ACH vs. wallets vs. everything else.](https://paymentsandrisk.com/docs/payments/payment-methods)
Experiment to Run
**Test capture timing:** For one product line, compare capture-at-shipment vs. capture-at-order. Measure "goods not received" disputes vs. operational complexity over 30 days.
* * *
**Payment Methods (cards, bank transfers, wallets, and alternatives)**
[💳 Cards Credit/debit, interchange tiers](https://paymentsandrisk.com/docs/payments/payment-methods/cards)
[🏦 Bank Transfers ACH, direct debit, check conversion](https://paymentsandrisk.com/docs/payments/payment-methods/bank-transfers)
[⚡ Real-Time Payments RTP, FedNow, instant payouts](https://paymentsandrisk.com/docs/payments/payment-methods/real-time-payments)
[📱 Digital Wallets Apple Pay, PayPal, Pay by Bank](https://paymentsandrisk.com/docs/payments/payment-methods/digital-wallets)
[🌐 Alternative Methods BNPL, crypto, mobile money](https://paymentsandrisk.com/docs/payments/payment-methods/alternative-methods)
[🎯 Choosing Methods Decision framework by business type](https://paymentsandrisk.com/docs/payments/payment-methods/choosing-methods)
Before Adding a Payment Method
Run a 2-week checkout survey: "What payment method do you wish we had?" If fewer than 10% of customers mention it, it's probably not worth the integration effort.
* * *
## Next Steps
New to payments?
1. [Authorization & Capture](https://paymentsandrisk.com/docs/payments/auth-and-capture) - How transactions work
2. [Settlement & Reconciliation](https://paymentsandrisk.com/docs/payments/settlement) - Where your money goes
3. [Payment Methods Overview](https://paymentsandrisk.com/docs/payments/payment-methods) - Your options
4. [Selling Internationally](https://paymentsandrisk.com/docs/payments/selling-internationally) - If you get foreign orders
Running a business?
1. [Buying Payments](https://paymentsandrisk.com/docs/payments/buying-payments) - Choose the right processor
2. [Checkout Conversion](https://paymentsandrisk.com/docs/payments/checkout-conversion) - Stop losing sales
3. [Auth Optimization](https://paymentsandrisk.com/docs/payments/auth-optimization) - Improve approval rates
Scaling up?
1. [Interchange](https://paymentsandrisk.com/docs/payments/reference/interchange) - Optimize your fees
2. [Digital Wallets](https://paymentsandrisk.com/docs/payments/payment-methods/digital-wallets) - Add Apple Pay, Google Pay
3. [Going Global](https://paymentsandrisk.com/docs/payments/going-global) - International expansion
* * *
New to payments?
Start with **[The Guide, Pathway 1: Getting Started with Payments](https://paymentsandrisk.com/docs/learning-pathways/getting-started-with-payments/introduction/)**, It's a 20-minute walkthrough of how money moves, choosing a processor and understanding fees. This page is the deep dive.
Looking for a definition?
See the [Glossary](https://paymentsandrisk.com/docs/reference/glossary/) for quick definitions of payments and fraud terms.
## See Also
[❌ Decline Codes](https://paymentsandrisk.com/docs/reference/decline-codes)[🛡️ Fraud Prevention](https://paymentsandrisk.com/docs/fraud)[💳 Chargebacks](https://paymentsandrisk.com/docs/chargebacks)[🔒 PCI DSS](https://paymentsandrisk.com/docs/compliance/pci-dss)[🌍 Selling Internationally](https://paymentsandrisk.com/docs/payments/selling-internationally)
- [Processor Management](https://paymentsandrisk.com/docs/operations/processor-management/) - Multi-processor strategy
- [AVS & CVV](https://paymentsandrisk.com/docs/fraud/prevention/avs-cvv/) - Verification signals
- [3D Secure](https://paymentsandrisk.com/docs/fraud/prevention/3ds/) - Authentication and liability shift
- [Risk Scoring](https://paymentsandrisk.com/docs/fraud/prevention/risk-scoring/) - Transaction scoring
- [Money Held or Frozen](https://paymentsandrisk.com/docs/operations/holds-and-reserves/) - Cash flow impacts
- [Payments Metrics](https://paymentsandrisk.com/docs/payments/metrics/) - Performance tracking
- [Refund Strategy](https://paymentsandrisk.com/docs/chargebacks/refund-strategy/) - When to refund