Acquirers, issuers, merchants, card schemes. The card payments universe can be complicated for the uninitiated. If you’re a business owner, knowing all the actors that come into play each time you accept a customer’s payment card can help you make the most informed decisions for your business. So, who are the players, what do they do, and how does each affect a merchant like you?
Maybe you are an entrepreneur who is about to start working with an acquirer and trying to learn the basics about what an acquirer can do for you. Or, you are in the middle of a payment dispute and want to expand your knowledge about issuers and card schemes and their role in the dispute process. Perhaps you’d simply like to upgrade your knowledge about the card payment industry. In any case, we’ve got you covered.
Card Payments and The Entities Involved in Them
If we were talking about cash transactions, the explanation would be simpler. In a cash environment, the merchant only needs to consider the customer, the cash, and their financial institution. The customer purchases a good or a service by exchanging their cash with the merchant. The merchant places the cash in their financial institution. The moment the exchange of goods or services happens, the transaction is over. Simple, right?
In its essence, a card payment at a store or e-commerce business is also quite simple. What complicates it is that both the cardholder and the merchant have a financial institution which represents them. The issuer represents the cardholder whereas the acquirer represents the merchant. The transaction happens via rules governed by the card scheme which represents the card used by the cardholder. There are additional processes in the middle, such as client authentication or extra layers of security. But these are the main players.
To make this information easier to visualise, we have broken down each of the main players in this handy infographic. We hope it is useful for you!