Issuer, acquirer, processor, network: who does what

Every card sale involves four kinds of players. The issuer is the customer's bank, which gave them the card. The acquirer is the merchant's bank, which accepts card payments on your behalf. The processor moves the transaction data between them, and the card network sets the rules and connects everyone. Knowing who does what helps you read your statement and ask better questions.

The names get used loosely in sales pitches. Here's the plain version, and how the money moves through each step.

What does the issuer do?

The issuing bank is the customer's side of the sale. It issued the card, holds the customer's account or credit line, and decides whether to approve each purchase.

When a customer taps at your counter, the issuer checks the available balance or credit, looks for signs of fraud, and sends back an approval or a decline.

The issuer also collects interchange, the largest single fee in most card sales. That fee helps cover the issuer's costs, fraud losses, and any rewards on the card.

When a customer disputes a charge, the issuer is the one that starts the chargeback on the customer's behalf. So the issuer shows up twice in your world: at the approval and at the dispute.

What does the acquirer do?

The acquiring bank is on your side. It has a relationship with the card networks that allows it to accept card payments for merchants. When your sales settle, the acquirer is the bank that pays out the funds that end up in your business bank account.

The acquirer also takes on some risk. If a merchant racks up chargebacks and can't cover them, the acquirer may be on the hook. That's why merchant accounts go through an approval process, and why acquirers care about your business type and sales volume.

Most small store owners never talk to their acquirer directly. You work with the company that set up your account, and that company works with the acquirer.

Where do processors and networks fit?

The processor is the technology in the middle. It takes the transaction from your terminal, formats it, routes it to the right network, and carries the approval back. Each night, it handles the batch of settled sales.

Sometimes the acquirer and processor are the same company. Sometimes they're separate. Either way, the processor is who your terminal talks to.

The card networks, sometimes called card schemes, are the brands on the card. They set the rules for how transactions work, run the network that connects issuers and acquirers, and publish the interchange tables. They also charge their own assessment fees on the volume that flows through them.

How does money move through all four?

Here's a hypothetical $100 sale, simplified, with made-up round figures for illustration only.

1. The customer taps. Your terminal sends the sale to the processor.
2. The processor routes it over the card network to the issuer.
3. The issuer approves and holds $100 against the customer's account.
4. You close your batch that night. The sale settles.
5. The issuer sends the funds, minus interchange, through the network.
6. The network takes its assessment fee.
7. The acquirer receives the rest, subtracts its own markup and service fees, and pays you.

If interchange in this example were $1.80, assessments $0.14, and the provider's markup $0.40, you'd receive $97.66. Real numbers vary by card, network, and plan. The point is that each player takes a piece at a specific step.

Why should a store owner care?

Because every fee on your statement belongs to one of these players. Interchange goes to the issuer. Assessments go to the network. Markup and service fees go to your provider and acquirer.

When a fee changes, knowing whose fee it is tells you whether it's negotiable. Interchange and assessments generally aren't. Your provider's markup and service fees are the part of your pricing plan you can compare and discuss.

If you want to see how your costs break down, the NRS Pay team can walk you through a statement. You can also read NRS Pay's story and how it fits with the NRS POS.