Issuer
An issuer is the bank or financial institution that issues a credit or debit card to the cardholder and is responsible for authorizing transactions.
Issuer
The issuer (also issuing bank or card issuer) is the bank that issues a credit or debit card to the end customer. In the payment process, the issuer is responsible for authorising or declining transactions u2014 based on the available balance, credit limit, and security rules.
When a cardholder initiates a payment, the issuer receives the authorisation request via the card network (Visa, Mastercard) and verifies whether the transaction can be approved. If authorisation is successful, the amount is reserved from the cardholder's account and later transferred to the acquirer.
The issuer receives the interchange fee for each transaction u2014 a fee that the acquirer pays to the issuer. In the EU, the interchange fee is regulated (0.20% for debit cards, 0.30% for credit cards). In Switzerland, there is no statutory upper limit, but the fees are at a similar level.
Issuer Examples
UBS issues Visa credit cards to its customers — in this case, it is the issuer.
When a UBS cardholder makes a payment at an online shop, UBS as the issuer checks whether the transaction can be authorized.
The issuer receives the interchange fee for each transaction as compensation for card issuance and credit risk.
Issuer FAQ
What is an issuer in payment processing?
An issuer is the bank or financial institution that issues a credit or debit card to the cardholder. The issuer authorizes transactions and carries the credit risk towards the cardholder.
What is the interchange fee?
The interchange fee is a fee paid by the acquirer to the issuer for every card payment. In the EU, it is regulated at 0.20% (debit) and 0.30% (credit). In Switzerland, there is no legal ceiling.
Who is the issuer of my credit card?
The issuer is listed on the back of your card or in your bank contract. In Switzerland, typical issuers are UBS, Credit Suisse (now UBS), ZKB, Raiffeisen, Cembra, or Swisscard.
What is the difference between an issuer and a card network?
The issuer issues the card and bears the credit risk. The card network (Visa, Mastercard) provides the infrastructure through which authorization and settlement between the issuer and acquirer are processed.
