Card issuing

A card issuer is a financial institution, a bank, a payment or electronic money institution which issues a bank card to a customer, who is the cardholder. The issuing of cards enables cardholders (customers) to make secure payment transactions, both in-store and on-line.  

Card issuers may offer several uses and types of bank cards that meet their customers’ needs, in particular:  

For everyday use: debit or credit cards, prepaid cards linked or not linked to a bank account.  

For professional use: commercial cards which facilitate the management of expenses and the monitoring of transaction data for this specific activity. 

These cards may be digital and found in mobile wallets such as XPay or simply through the generation of virtual cards to pay for on-line purchases safely. 

The card issuer plays a key role in the management of the card programme, in payment security and in improving the customer experience. 

Card issuers and card networks are two separate entities that have a complementary role in the payment card ecosystem.  

🔹 Card issuers: Generally banks and financial institutions. They are responsible for issuing cards, managing cardholders and authorising transactions. They define the card ceilings, depending on the financial profile of the customer, offer credit functionalities through credit cards and ensure customer service through branches or apps.  

🔹  Card networks (Carte Bancaire, Visa, Mastercard, Bancontact, etc.): they act as intermediaries between the various banks accepting card payments to merchants (acquiring banks) and the bank providing cards to their cardholders (issuing banks).   

Card networks are based on two fundamental concepts: interbanking and universality.  

They enable all cardholders to pay for purchases with any merchant. 

Ultimately, the card issuer authorises the payment that their customers (cardholders) will make with a merchant or any company that accepts card payments. To be able to work, the card issued to the customer must be activated before being used.  

The card issuer is involved in which functions?  

Issuing the card: card generation, sending it to the customer (cardholder), activating it.  

Payments: Payments can be broken down into two separate stages: 

Authorisation: this phase takes place in real time when a customer makes a payment. The card issuer checks the validity of the account, in some cases the availability of funds or checks the expenditure ceiling, then authorises or rejects the transaction.  

Clearing: this phase generally takes place at end-of-day, after the stores have closed. It involves receiving all the account movements to be recorded. The card issuer then debits its customers and pays the merchant’s bank (acquiring bank). 

Throughout the card’s life cycle, the card issuer manages events related to the cardholder’s activity: payments, ceiling changes, digitalisation, upgrading of geographical checks. It also manages deferred payments, disputes and fraud prevention.  

The overwhelming majority of payments are made by card. 

Card issuers who provide these cards to customers are a vital link in this cycle. 

They ensure transaction security and authorise payments in accordance with each cardholder’s profile. They combat fraud by rolling out static rules and behaviour patterns in addition to strong authentication for their cardholders, ensure proper card acceptance and ultimately that merchants get paid.  

By simplifying transactions and reducing risks, card issuers are strategic partners in merchants’ development. 

Card issuers and acquiring banks are two separate entities that interact through card networks to ensure smooth transactions.  

Card issuer: this is the issuing bank or financial institution which provides a card to customers (cardholders). It manages card issues, authorises payments and also ensures that cardholders have sufficient funds.  

Acquiring bank: this is the merchant’s bank. It is connected to the various on-line and in-store payment solutions which are used by the merchant. It accepts payment cards, processes transactions and ensures that merchants receive payment.  

For example, when a customer pays for a purchase by card, the card issuer checks and authorises the transaction, while the acquiring bank receives the payment and transfers it to the merchant.  

In short, the card issuer provides the payment card and authorises payments, while the acquiring bank enables merchants to accept and receive payments.