Card Payments Flashcards
(37 cards)
Which card brands are considered Open Loop networks?
MasterCard and Visa
Which card brands are considered Closed Loop networks?
American Express and Discover
A multi-party network that connects two financial institutions, issuing financial institution and acquiring financial institution and manages flow of value between two financial institutions.
Open Loop Network
Visa and Mastercard are examples of open loop networks
Provides payment services directly to merchants and card holders by the owner of the network, without involving third-party financial institutions as intermediaries.
Closed Loop Network
Gift Cards, Discover, and Amex
Which two broad groups do Debit Cards fall into?
- Those designated exclusively for Automated Teller Machine. (ATM)
- Those that can also be used for payment for purchases from retail merchants.
This type of card is similar to debit cards but are not linked to an individual bank account and may therefore be issued by nearly any type of business or organization.
Prepaid debit cards
An individual who has been issued or is authorized to use a credit, charge, debit or prepaid debit card.
Cardholder
The entity that issues a payment card to the cardholder and is responsible for the provision of customer service for the life of the card.
Card Issuer
An organization that represents merchants in the processing, acceptance and settlement of POS transactions. For transactions involving the Visa and Mastercard networks, they must be sponsored by a bank with a license to use the network.
Acquirer
Organizations, typically with a global reach that operate a network of systems that facilitate the routing of payment card authorization requests, corresponding responses, and settlement transactions between acquirers and issuers.
ATM/Payment Network
An entity that has agreed to accept a payment card for purchase of goods and services at its locations.
Merchant
This is used to classify the business by the goods and or services it provides.
The Merchant Category Code (MCC)
Terms commonly used to identify the method of which a merchant accepts payments are…
- Card Present
- Keyed Transaction
- Card Not Present
Is an amount charged to merchants for each card payment and paid to the Card Issuer.
Interchange Fee
Enforces compliance among network participants; and conceive and develop new payment card related technologies and services.
ATM/Payment Network
Are not true payment instruments because they do not result in a direct transfer of funds from the payor to the payee.
Credit Cards
Access devices to a stored balance
Prepaid Card/Stored Value Cards
Access Devices most commonly associated with access to balance in Checking or DDA Account
Debit/ATM/Bank Cards
A bank account from which deposited funds can be withdrawn at any time, without advance notice.
Demand Deposit Account (DDA)
These networks provide communications, transaction authorization and interbank financial settlement for their member financial institutions.
POS and ATM Networks
Are typically transmitted from the merchant POS to an acquirer, from the acquirer to a network switch, and from the network switch to the card-issuing financial institution or an organization authorized to act on behalf of the issuer.
Credit and charge card payments
The first step in the electronic payment handling
Involves the processing of an authorization request from the merchant and returning an approval or decline message.
Network Batch settlement process
The issuer remits funds for the original amount of payment to the Acquirer.
How often does the acquirer issue an electronic credit to the merchant, after subtracting the interchange and the acquirer fees?
On a periodic basis
