An issuing bank is a financial institution that provides a payment card or card account to the cardholder and decides whether card transactions are authorized. It is also called an issuer.
What does the issuing bank do?
It manages the cardholder account, verifies transaction information, applies fraud and credit controls, approves or declines authorization and posts cleared transactions.
Issuer versus acquirer
The issuer serves the cardholder side. The acquirer serves the merchant side and routes transactions into the card network.
How does the issuer affect payment outcomes?
The issuer can request authentication, decline a transaction, approve it, reverse an authorization or initiate a dispute under network rules.
How does the issuer earn revenue?
Depending on the product and market, revenue can include interest, cardholder fees and interchange received through the network.
What should a merchant understand?
An issuer approval confirms authorization at that moment, not final settlement or protection from all chargebacks.
