What is Batching in credit card processing?

Batching in credit card processing refers to the practice of collecting and grouping all authorized transactions during a specific timeframe and processing them together after the close of business. This method is used primarily to improve efficiency and streamline the transaction processing workflow. By accumulating transactions throughout the day and processing them in bulk at once, businesses can reduce the time and resources needed for individual transaction processing.

This approach not only helps in managing the high volume of transactions but also allows for more effective reconciliation and reporting at the end of the day. Additionally, batching can help in reducing processing fees and optimizing the overall transaction management system for merchants.

Real-time processing, proposed in the first option, refers to transactions being processed instantaneously as they occur, which is different from batching. The second option focuses on processing all transactions at the beginning of the business day, which does not align with the practice of batching. The last option, which mentions processing each transaction separately as they come in, also contrasts with batching, emphasizing the distinct nature of processed transactions in separate instances rather than collectively.