Credit Card System

ELECTRONIC CREDIT CARD SYSTEM ON THE INTERNET

The players

The cardholder: a consumer or a corporate purchaser who uses the credit card to pay the merchants.

The merchant: the entity that accepts credit cards and offers goods or services in exchange for payments.

The card issuer: a financial institution (usually a bank) that establishes accounts for cardholders and issues credit cards.

The acquirer a financial institution (usually a bank) that establishes an account for merchants and acquires the vouchers of authorized sales slips.

The card brand: bank card association like Visa Card and /master card, establish rules for use and acceptance of their bank cards.

The Process of Using Credit Cards:

Issue a credit card to a potential cardholder

A potential cardholder requests an issuing bank, from in which the cardholder may have an account, the issuance of card brand

The issuing bank approves (or denies) the application.

If approved, a plastic card is physically delivered to the customers address by mail.

The card is activates soon as the cardholder calls the bank foe initiation and signs the back of the card.

The cardholder shows the card to a merchant whenever he or she needs to pay for a product or service.

The merchant then asks for approval from the brand company, and the transaction is paid by credit.

The merchant keeps a sales slip.

The merchant sells the slip to the acquiring bank and pays fees for the service. This is called a capturing process.

The acquiring bank requests the brand to clear for the credit amount and gets paid. Then the brand asks for the clearance to the issuer bank.

The amount is transferred from the issuer to brand. The same amount is deducted from the cardholder’s account in the issuing bank.