To better understand the distinction between an issuing bank and an acquiring bank, take a look at this simplified visual:

🧑‍💼 Issuing Bank

Represents the cardholder

  • 💳 Provides credit or debit cards
  • 🧾 Authorizes payments for purchases
  • 🔍 Monitors spending and detects fraud
  • 🧍‍♂️ Interacts with consumers
  • 💬 Handles disputes and chargebacks

🏪 Acquiring Bank

Represents the merchant

  • 🏦 Provides merchant accounts
  • 🛒 Receives transaction requests
  • 📤 Transfers funds to merchant after approval
  • 🛍️ Interacts with merchants
  • 📁 Manages chargeback responses

🔁 How They Work Together

  1. Customer uses a card → Issuing bank checks & approves transaction
  2. Merchant submits payment → Acquiring bank processes the transaction
  3. Funds move from the issuing bank → acquiring bank → merchant’s account


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