Card-Present Transactions or "Swiped" Transactions

Cardholder is an authorized user of a MasterCard or Visa card who has established a line of credit with the Issuer.

Issuer is a member financial institution of MasterCard and/or Visa Card Associations who issues a credit card to the cardholder under an agreement for repayment, such as Citibank, Capital One, or Chase, for example.

Merchant is an authorized acceptor of Visa or MasterCard cards as payment for goods and services.

Merchant Bank/Acquirer, such as Elavon, is a Visa or MasterCard member institution that authorizes merchants to accept credit cards and receive payments through a merchant account program; Pays Visa, MasterCard and Issuer an interchange fee for transactions.

Visa and MasterCard are card associations that license their card brands to member financial institutions (i.e. Citibank, Capital One, etc.) that in turn provide services to cardholders and merchants.

VisaNet is the payment network that acts as an authorization service for Visa card transactions, as well as a clearing and settlement service to transfer payment information between parties to a card transaction (interchange).

INET is the payment network that acts as an authorization service for MasterCard card transactions, as well as a clearing and settlement service to transfer payment information between parties to a card transaction (interchange).

• Cardholder presents credit card for payment.
• Merchant swipes card, enters dollar amount, and transmits an authorization request to merchant bank (i.e. Elavon)
• Merchant Bank electronically sends the authorization request to the cardholder’s Issuer (i.e. Citibank, Chase, Capital One)
• INET or VisaNet routes the request to the cardholder’s Issuer.
• Issuer approves or declines the transaction.
• INET or VisaNet forwards the Issuer’s response to the merchant bank.
• Merchant Bank forwards the Issuer’s response to the merchant.
• Merchant receives the authorization response with a six digit approval code; completes the transaction accordingly.

• Merchant deposits transaction receipt with the merchant bank.
• Merchant Bank credits the merchant’s account and electronically submits the transaction to INET or VisaNet for settlement.
• INET or VisaNet pays the merchant’s bank and debits the Issuer account then sends the transaction to the Issuer.
• Issuer posts the transaction to the cardholder account and sends the cardholder a monthly statement.
• Cardholder receives the statement and pays Issuer.