The four-party card model describes a card-payment structure involving the cardholder, merchant, issuer and acquirer. A card network connects the issuer and acquirer and sets scheme rules.
Who are the four parties?
The cardholder uses the card, the merchant accepts it, the issuer provides the card account and the acquirer enables the merchant to process transactions.
How does authorization move?
The merchant sends the request to the acquirer, the network routes it to the issuer, and the response returns along the same chain.
How does money settle?
Clearing determines obligations among participants. The issuer funds the transaction through the network and acquirer, which settles to the merchant after applicable fees and adjustments.
Where do fees arise?
Costs can include interchange paid toward the issuer, network assessments and acquiring or processing charges. Merchant pricing may combine these components.
Four-party versus three-party model
In a three-party model, one scheme may serve both cardholder and merchant sides directly, though partners can make real arrangements more complex.
