Issuer/issuing bank

What is an issuer/issuing bank?

An issuer, or issuing bank, is the bank that issues cards (credit, debit, or prepaid cards) to customers. The cardholder is thus a contractual partner of the issuer. The issuing bank takes care of processing on the customer side, while the acquiring bank takes care of card acceptance and payment processing on the merchant side.

Both parties are important for a functioning card business, as otherwise the corresponding infrastructure (card on the customer side, acceptance agreements on the merchant side) is not present. A bank, such as Wirecard Bank, can take on either the role of the issuer or the acquirer.

The parties involved in a card transaction

When issuing the card, the card issuer establishes the required infrastructure. The acquirer ensures that merchants can accept card payments. The issuer, acquirer, and credit card organizations are all involved in payment processing.

What does the issuing bank do?

The issuing bank ...

• issues the card to the user as a financial service provider.
• settles payments made by the cardholder with the acquirer of the merchant.
• is funded by fees paid by the cardholder and the acquirer.