In turn, an issuing bank is responsible for issuing credit and debit cards to consumers. What Is the Difference Between an Acquiring Bank and Issuing Bank?Īn acquiring bank works with clients by providing merchant accounts and collecting money owed to merchants by card-issuing banks. In addition, a card-issuing bank provides the following services: If a customer’s funds are insufficient to complete a payment, both banks (issuing and acquiring) will usually split the credit obligations according to the card network rules. The primary responsibility of card-issuing banks is to undertake obligations to settle cardholders’ debts. After the decision is made, the status of a purchase is sent back to the payment processor, which submits it to the customer. During the transaction, the issuer checks the card account’s activity, availability of the requested funds in the account and either authorizes or declines the customer’s purchase. When a customer buys an item, their card information is sent to a payment processor that transfers it to the issuing bank. Looking at the transaction process in detail, an issuing bank acts as a mediator in “customer – card scheme (Visa, American Express, MasterCard, etc.)” communications, and it is responsible for the actual financial security of the cards. Some of the largest issuing banks include major players such as HSBC Holdings plc, BNP Paribas S.A., and Bank of America. If you want to know the name of your issuing bank, you can find it on your credit or debit card (usually the bank’s logo is on the front on the back of the card, there is additional information about the bank’s location and its contact details). In this regard, an issuing bank is also referred to as a card-issuing bank or an issuer. It is a financial institution that issues credit and debit cards to its clients and allows them to make purchases with these cards. What Is an Issuing Bank?įrom the customer’s standpoint, an issuing bank plays a significant role in the transaction process. Today, we will explain what an issuing bank is, its role for customers and e-merchants, and how it differs from an acquiring bank. In a previous article, we covered some useful information about internet acquiring, what an acquiring bank is, and its role in the transaction process.
0 Comments
Leave a Reply. |