Issuer/Issuing Bank

The issuing bank is a bank that provides credit and debit cards to individuals. Usually, these are major commercial banks. Another name of an issuing bank is the issuer or bank eminent. Let’s take a look at the role of an issuing bank in the payment processing.

An issuing bank offers payment cards to consumers on behalf of the credit card networks — for example, Visa, MasterCard, or American Express. The issuing bank is also responsible for providing the financial backing for the transactions processed with the card. It is also accountable for cardholder’s ability to pay off their debt accumulated with the credit card. The issuing bank is also in charge of the consumer’s financial information and account data safety. Card renewal, card limit setting, suspension, blockage, and card activation are among other services of issuing banks.

Difference Between the Acquirer and Issuer

The acquiring bank (also known as a merchant bank or acquirer) is the financial institution that opens and regulates the merchant’s bank account. The contract with the acquirer allows merchants to process credit card transactions online. The merchant’s acquiring bank cooperates with the client’s issuing banks to enable the payment processing.

The issuing bank is the financial institution that issues credit cards to consumers on behalf of the card networks (Visa, MasterCard, e.g.). The issuer acts as a mediator between a consumer and the card network.