What is a card issuer?
The Issuer, also called Issuing Bank, is the bank that issues the cards (such as debit cards e.g. Maestro or Visa Electron and credit cards such as Visa and Mastercard).
The cardholder first receives the credit card or debit card from the issuer, which can then be used to purchase goods or services. This requires that the seller accepts card payments; to do so, the seller must be a contracting company of an acquiring bank, known as an acquirer.
Card issuers are retail banks and create the infrastructure for the card business by issuing the cards. The acquirer handles the settlement of the card sales of the contracting companies, i.e., the stores and businesses that accept card payments.
The card-issuing banks
- settle the transactions made by their cardholders with contracting companies from a wide range of acquirers;
- try to turn as many of their own customers as possible into cardholders through appropriate sales measures, but often also as many non-customers as possible through special offers;
- strive for a profitable card portfolio, the income from which depends in particular on the number of cards or on the card sales generated.
