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Different parties in credit card processing

Credit card processing are related to: card holder, issuing bank, merchant, merchant bank, credit card association.

Card holder is who like you and me applied for a credit card with bank. The bank verify and filter the application and approve for a certain amount credit for the card holder. The card holder can use credit card to buy merchandise and service from the seller and online merchant. Car holder need to pay the bill of the card statement that issued by the issuing bank monthly. Card holder also has the convenience and priority of using a credit card.

Issuing bank is the financial institution which issued the credit card. The responsibility of a issuing bank is: 1.reviewing and approving the card application request; 2. Receiving and pay the transaction passed from Visa or Mastercard; 3. Issuing billing statement to card holder.

Merchant is the online seller who accept the credit card payment. Merchant credit card processing can be the seller who sell tangible products and provide services. Such as: Supermarket, hospital, hotel, restaurant and so on. As long as they can meet the Visa and Mastercard certificates standards. And the merchant is required to obey the contract terms.

The merchant bank is also called acquiring bank. They verify and accept merchants and charge a fee for merchant’s transaction processing request. The merchant bank maintain the relationship with merchant and card holder.
There are also some third parties who provide technical and payment support.