Question

Explain the key players of a credit card payment system and bring out the merits of it.

Answer 1

Key players in operations of credit cards-

• Bearer: 
  The holder of the credit card account who is responsible for payment of invoices in full (transactor) or a portion of the balance (revolver) the rest accrues interest and carried forward.
• Merchant:
  Storekeeper or vendor who sells or providing service, receiving payment made by its customers through the credit card.
• Acquirer: 
  Merchant’s bank that is responsible for receiving payment on behalf of merchant sends authorization requests to the issuing bank through the appropriate channels.
• Credit Card Network:

1. It acts as the intermediate between the banks.
2. The Company is responsible for communicating the transaction between the acquirer and the credit card issuer.
3. These entities operate the networks that process credit card payments worldwide and levy interchange fees. E.g. Visa, MasterCard, Rupay

• Issuer:
  Bearer’s bank, that issue the credit card, set a limit of purchases, decides the approval of transactions, issue invoices for payment, charges the holders in case of default and offer card-linked products such as insurance, additional cards, and rewards plan.