Grant @ myposdepot
Visa, MasterCard, and Discover do not issue any credit cards. Rather, they license their payment brands to Issuers and Acquirers. Issuing banks are the entities that provide the consumer, with the credit cards in their pocket. Acquirers are the entities that process the transactions. We are part of the acquiring side. As a registered Independent Sales Organization (ISO) of Visa and MasterCard, we pay them thousands of dollars a year for the privilege of using those brands.
Transaction Process
As shown in the Transaction Process above, Visa, MasterCard, and Discover do not approve transactions. The bank that issued your credit card approves the transaction. The issuing bank takes on the risk that the consumer will pay them back for the items they purchase. In turn, the issuing bank gets paid Interchange-not Visa and MasterCard
The cost of interchange depends on the card type that is presented. A check card, which is tied to your checking account, is a low risk, low cost interchange. If you don’t have money in your checking account, the transaction is declined.
Corporate, government and foreign credit cards are high risk. They have the highest interchange rates. You may ask why. Simply, if someone from a foreign country buys an item here but refuses to pay for it later, perhaps because of a dispute, it is very difficult, sometimes almost impossible to get that money back. Also, people in corporations and government make purchases that are not authorized by higher management. If they quit or are terminated, these entities will often dispute the charges as unauthorized. This makes these three card types high risk.
Grant Rowlands
National Account Executive
P: (866) 480-2433
Follow MyPOSDepot & Receive Exclusive Offers!
myposdepot 