Visa has been providing cost-effective data rich commercial payment solutions from about 20 years. It is the world’s largest, reliable, secure and open financial network.
Lets see who are the key people involved in this process. Before that let me tell you who are acquirers and issue banks. An acquirer is a member of a card scheme, for example Visa, which maintains merchant relationships and receives all bankcard transactions from the merchant. An issue bank is the bank which issues cards like our debit or credit cards issued by X bank, X is the issue bank.
Now lets see how a transaction is authorized.
The logo shown above was the old one, the new logo is on the top right corner of this post, you can check it by taking out you visa enabled credit/debit cards.
Lets see the clearing and settlement in the next step.
Thats the new logo!
Now effectively the summary of transactions is:
The term merchant discount means the amount paid by merchant to acquirer, it is also known as acquirer discount fee, dont get confused with the word discount here.
But how does visa makes it money?
Simple, it charges banks to issue its cards, and charges merchants to accept the cards.
Forget about how much they charge. Lets not get into their business.
Filed under: Business | Tagged: acquirer, acquirer discount fee, card transactions, credit cards, debit cards, electronic transfer, how visa works, interchange fee, issue bank, mastercard, mechant discount, merchant, Visa, visa logo | Leave a comment »
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