2 PAYMENT METHOD PROFILES: CARD
Key Stakeholders in Four-Party Card Network Model
Gateway
Network
Merchant
Card Acquirer
Card Issuer
Consumer
Gateway Fees, Acquirer Fees, Network Fees, Interchange Fees
Network Fees, Interchange Fees (passed through to merchant)
Account Fees, Interest Payments, Overdraft Fees
Network Fees, Rewards/Cashback
Pays
Interchange Fees, Account Fees, Interest Payments, Overdraft Fees
Receives
Rewards/Cashback
Gateway Fees
Acquirer Fees
Network Fees
Sets the Level Of
Network Fees, Inerchange Fees
Gateway Fees
Acquirer Fees
Figure 2.7 In a three-party card network, one entity often performs the role of acquirer, issuer and network. These financial institutions contract directly with merchants and consumers, in addition to providing their own payments infrastructure. Prominent examples of three-party networks include American Express and Discover. Fee structures are generally simpler for a three-party card network, since there is usually only one entity being paid. As a result, there is no need for separate interchange, network and acquirer fees; merchants tend to be levied one single fee for each transaction. Three-Party Card Network Model
Initiates Card Payment
Consumer
Merchant
Gateway
Card Network
Card Issuer
Card Acquirer
In the three-party card network model, one entity performs the role of the issuer, the network and the acquirer.
Figure 2.8
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