Cardholder: The owner of a card that is used to make credit card purchases.
Card network: Visa, MasterCard or other networks that act as an intermediary between an acquirer and an issuer to authorize credit card
Clearing: The third step in processing a credit card. After the acquirer receives the batch, it sends it through the card network, where
each sale is routed to the appropriate issuing bank. The issuing bank then subtracts its interchange fees, which are shared with the card network, and
transfers the remaining amount through the network back to the acquirer.
Discount fee: A processing fee paid by merchants to acquirers to cover the cost of processing credit cards.
Funding: The fourth and final step in processing a credit card. After receiving payment from the issuer, minus interchange fees, the
acquirer subtracts its discount fee and sends the remainder to the merchant. The merchant is now paid for the transaction, and the cardholder is billed.
Interchange Fee: A charge paid by merchants to a credit card issuer and a card network as a fee for accepting credit cards. They
generally range from 1 to 3 percent.
Issuer: An financial institution, bank, credit union or company that issues or helps issue cards to cardholders.
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