Credit card processing consists of different key players that are involved when it comes to authorization and settlement. These key players are the cardholder, the merchant, the acquiring bank, the card issuer, and the credit card associations.
The Cardholder
Anyone who owns a credit or debit card is already very familiar with their role as the cardholder. For someone who owns a bankcard provided by their chosen bank is called a cardholder. The card issued to them can be used to purchase any goods or services.
The Merchant
Generally, a business that sells any goods or services is called a merchant. A merchant is also known as a business that keeps a merchant that allows them to accept payments via debit or credit cards for any goods or services offered.
Acquiring Bank
An acquiring bank is usually known as a merchant bank since they are the ones who communicate with merchants to make and maintain an account that enables the accepting of payments via debit or credit cards. They also supply merchants with software and equipment to accept card payments and manage customer support and other important factors involved in accepting a card for payment. They also transfer money coming from a credit card sale then into the merchant’s account.
Who Processes Credit Card Payments?
Issuing Bank
An issuing bank provides or issues a credit card to their customers and is an active member of the card associations. Their role is to pay acquiring banks for all their cardholder’s purchases. However, every cardholder has a responsibility to pay back their issuing bank.
The Card Associations
Two of the well-known card associations are Visa and MasterCard. However, they don’t provide credit cards or merchant accounts. Their main role is to assist a group of financial institutions, MSPs and ISOs that help each other in connection to assist credit card processing and E-payments.
Visa and MasterCard aren’t banks, and they are not responsible for issuing merchant accounts and credit cards. They work as the governing body of a community of financial institutions, ISOs, and MSPs that work together in association to support both credit card and electronic payments processing.
In building and defining the digital payment services' modern infrastructure, the key players play a significant role. Even though, it’s easier to make payments on any balance or minimum or some amount in between, keep in mind that errors are fairly common on credit card processing. Whether you have or not all of your credit card receipts compare as many as you have to the items listed in your statement to make sure that the amount and dates are right.
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