The Payments Value Chain

By Payfirma

The value chain of credit card processing can seem like a complex topic, so we broke it down to make it simple to understand.

• 

  1. Acquirer

  An acquirer (Chase, First Data, etc) solicits, underwrites and owns the merchant account. They provide technology and hardware, which enables the merchant to process the transaction.

• 

  2. Issuer

  The issuer is the bank (CIBC, RBC, etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder, billing and collecting the owed funds.

• 

  3. Credit Card Associations

  The role of the associations (Visa, MasterCard, etc.) is to govern the policies pertaining to their bank cards, monitor processing activity, and oversee the clearing and settlement of transactions.

• 

  4. Payment Processor

  Processors (Payfirma) are organizations that partner with acquirers to open merchant accounts, handle support, manage payment processing, and build added-value technology on behalf of acquirers.

• 

  5. Merchant

  The merchant is a business owner who submits a request to an ISO/acquirer to accept credit. Merchants are approved under the qualifications set by the associations and the policy of the underwriters.

• 

  6. Cardholder

  Cardholders (consumers) are customers of a bank. The cardholder will be approved by the issuer based on creditworthiness.