2 PAYMENT METHOD PROFILES: CARD
Supply Chain Structure The four parties in the four-party card network model are consumers, issuers, merchants and acquirers. Merchants typically interact directly only with their customers and their card acquirer – they generally do not directly interact with networks or issuers. Card networks usually act as “referees” in the four-party system by sending transaction information between issuers and acquirers and creating network rules for all participants in the system. The figure below shows how the four parties interact in a typical transaction. Four-Party Card Network Model
Initiates Card Payment
Consumer
Merchant
Gateway
Card Network
Card Issuer
Card Acquirer
Figure 2.6
Who Are The Key Players? An acquirer, also known as a ‘merchant acquiring bank’ or a card processor, is a bank or financial institution that manages the technical acceptance of payment cards for the merchant and ensures that funds from the cardholder are transferred to the merchant’s account. The issuer, also called the ‘cardholder’s issuing bank’, is typically a bank, credit union, or financial institution that supplies a consumer with a payment card to facilitate card transactions and represents the customer in those transactions. A card network, also known as a card scheme, such as Visa or Mastercard, acts as an intermediary that enables communication and transaction processing between the issuer and the acquirer. These networks set the rules and standards for transaction authorization and facilitate the secure transfer of funds between parties.
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