The card transaction process
Card transactions follow a basic process when being authorised and later when being processed and settled. This generic process includes five primary points of contact:
The following diagram sets out the steps, numbered from 1 to 8, in a card transaction’s payments cycle for a typical face–to–face or card present transaction; there are five stakeholders in the process.
Cardholder
A person who has an account with a financial institution and to whom a payment card (debit, credit or charge) has been issued.
Retailer/Merchant
The retailer is the organisation providing the cardholder with goods or services.
Acquirer/Merchant Acquirer
An Acquirer is the bank that is retained by a retailer or merchant to process payment card transactions on their behalf. Acquirers receive the details of card transactions from their retailer and pass them through to the card issuers (the cardholder’s bank or building society) for authorisation or processing.
Card scheme
Card Schemes are organisations who manage and control the operation and clearing of card payment transactions. Examples of schemes are: Visa, MasterCard, Maestro and American Express.
The Card Schemes are responsible for passing card transaction details from the Acquirer to the Card Issuer and for passing payment back.
Card Issuer
The Card Issuer is the bank, building society or organisation that provides a payment card (debit, credit or charge) to their customer. The Issuer is responsible for transactions that are put through on cards that they have issued and will be responsible for debiting funds from the relevant cardholder's account.
