Payments and fintech
Issuer
The bank or firm that gives a customer a card and, for credit cards, takes the credit risk.
Facts checked against sources onWhat does Issuer mean?
The issuer is the bank or financial firm that issues a payment card to a customer, holds the customer's account, approves or declines each purchase and, for a credit card, lends the money and bears the risk that it is not repaid. It earns interchange on each purchase, plus interest and fees on credit cards, and it usually pays for rewards and fraud losses. Example: when you pay with a credit card from your bank, your bank is the issuer, and on a 100 purchase with 1.5 percent interchange it earns 1.50. In the usual four-party model, the issuer sits on the cardholder's side and the acquirer on the merchant's side.
Where does it come up in case interview prep?
Related terms
- AcquirerThe bank or firm that lets a merchant accept card payments.
- Card scheme (card network)The network that sets the rules and connects issuers and acquirers, such as Visa or Mastercard.
- Interchange feeThe fee the merchant's bank pays the cardholder's bank on each card payment.
- Merchant discount rate (MDR)The total fee a merchant pays to accept a card or digital payment.
- Take rateThe share of each transaction's value that a platform keeps as revenue.
- Basis points (bps)One hundredth of a percent: 100 basis points make 1 percent.
- Buy now, pay later (BNPL)Paying for a purchase in a few interest-free instalments, with the merchant paying a fee.
- Real-time paymentsAccount-to-account transfers that settle in seconds, at any hour.
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