Who are the key players in card payment processing?

Small Business Advice 2 September 2013

Although to the untrained eye the processing of debt and credit card payments can seem like a straightforward transaction, there is actually a lot of unseen work that goes on.

It is, in fact, a surprisingly convoluted, but reassuringly thorough, process. However, given the amounts of money that change hands every day through card payment schemes, this shouldn’t really come as a major surprise.

Recent reports suggest that the number of transactions made using plastic has grown markedly in the last few years – and most experts feel that this trend is set to continue.

Here, we identify some of the key players behind card payments and explain their precise role in the process.

The consumer

The role of the consumer is small but imperative. He, or she, is where the whole process starts, with the card terminal prompting the buyer to insert their card and input the correct PIN number.

While the transaction from this point only takes a matter of seconds, things become a good deal more complex from here on in.

Merchant acquirer

The role of the merchant acquirer is to provide a merchant account and card terminal. The acquiring bank is sent the authorisation request from the card machine, before passing the transaction onto the next phase.

Card schemes

The likes of Visa and MasterCard are among the biggest card schemes on the market and they perform a crucial role in ensuring that a transaction is processed safely and securely. That’s because the card company is responsible for verifying the card details and passing the authorisation request onto the consumer’s bank.

The bank of the customer

Sometimes referred to as the issuing bank, the institution checks the customer details and whether there are sufficient funds in the account for the transaction to progress. At this stage – and remember, most of this is happening in the blink of an eye – the transaction process goes through another round of security checks.

Back to the card company

The card company revisited once again and  relays the information back to the acquirer. While this may seem quite trivial, it is important to recognise that card companies handle millions of transactions each day and so it is crucial that they are processed securely.

Back to the acquirer

Likewise, the transaction is sent through to the acquiring bank, which is required to confirm that the customer is genuine and has the means to make the purchase. And finally, at this point, the transaction is then ready to be completed at the till. What’s most impressive about this process is just how quickly a transaction can be finalised. As such, it is easy to be lulled into thinking that it is not safe and secure – but that couldn’t be any further from the truth.


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