You might also like Payment Facilitator vs ISO. What's the Difference? How Does a Payment Gateway Work? Posted in Payments Essentially, the issuing bank approves the acquiring bank and the sale is completed. An issuing bank is an important element since it is one of the parties involved in transaction disputes. These banks issue chargebacks and their reason codes and make the final call in the claim for the chargeback.
An issuing bank is also responsible for raising or lowering the limit on the card or blocking the account if necessary. Acquiring Bank vs. Acquiring a bank is the key factor in the whole process; without them not a single transaction would be finalized. That does not mean the bank can single-handedly complete every transaction. Acquiring bank authorizes transactions, but needs an issuer to confirm that your credit card is valid and that the purchase can be completed.
That creates a well-oiled mechanism that should work perfectly every time someone buys something from you or you purchase something with your credit card.
Use our Submit a Question feature to request additional information from our contributing experts. Your Email: Receive a notification when your requested topic is added to the knowledge base. Acquirer vs. Processing Payments: From Cardholder to Acquirer There are a number of different parties involved in a basic eCommerce transaction.
Top U. Total 31 Votes:. Back to Previous. Most businesses take credit card payments from their customers on a daily basis, but few think much about it. You may even wonder, what is a payment processor? A payment processor manages the credit card transaction process by acting as the mediator between the merchant and the financial institutions involved. A processor can authorize transactions and works on merchants getting paid on time by facilitating the transfer of funds. Some processors provide equipment for card acceptance, security solutions, PCI compliance assistance, customer support, and other value added services.
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