What are card issuers? Let's explore the term and main functions of card
issuers
The term "issuer" can be confusing to those who have never worked with cards before.
Some people may confuse it with other terms. Therefore, let's clarify the meaning
of "issuer".
What are card issuers?
Issuer is a bank engaged in issuing bank cards. The Issuer is always the owner of all
its issued cards.
The Issuer is broadly defined as a legal entity that puts into circulation securities,
traveler's checks, bills of exchange, payment documents. It can be an authority,
a stock exchange. Each issuer is subordinate to a higher regulator and operates
under a license from this regulator. For instance, in Russia it is the Central Bank.
Functions of issuers
One of the main functions of the issuer is to conduct transactions. The goal is
for the client to use card services and pay for purchases.
The concept of issuer is closely related to the concept of acquirer. Both the
issuer and the acquirer together participate in the transaction process. The
acquirer is a bank that serves the points of acceptance with bank cards.
Acquirer and issuer can be the same bank.
Transactions are immediate and based on an algorithm:
1. A person can use a card to pay for a purchase, either at the store or
through an online service.
2. The acquirer requests permission for the transaction from the issuer
through the processing center.
3. Issuer reviews request, sends permission to processing center.
4. Operation receives an authorization code.
5. Payment for the purchase is complete and the corresponding
amount has been deducted from the card..
Rights and obligations of the issuing bank
Issuers who issue their own cards define in the contract the rights and rules
of interaction with the customer. The issuing bank has the following rights:
- Monitor the account and check for any illegal or suspicious transactions;
- Block the account in case of suspicious transactions;
- Offer additional services.
Obligations of the issuing bank:
- Ensure the security of accounts and protect customer funds;
- Provide clients with 24/7 access to their funds;
- Reissue the card after it expires;
- Conduct instant transactions.
Conclusion
Issuers are organizations that issue cards and act as guarantors for financial
obligations. They handle card services and provide instant access and
transactions to customers. For instance, LeadingCards collaborates with
12 card issuers, which allows it to quickly issue trustworthy, reliable cards
that meet all the requirements of services and advertising platforms.