Credit Card Processing Overview

These flashcards cover key vocabulary related to credit card processing, explaining essential terms and concepts outlined in the lecture notes.

Cardholder

The customer who uses a credit card for payment; could be the owner or an authorized user.

Issuing Bank

The bank that issued the credit card to the cardholder and is responsible for authorizing transactions.

Merchant

A business that accepts credit card payments for goods or services.

Merchant Bank

Also known as an acquiring bank, it maintains the merchant account where funds from credit card transactions are deposited.

Payment Processor

A company that manages credit card transactions, authorizes payments, and may provide necessary hardware and software.

Authorization

The first step in credit card processing where the card is approved or declined.

Settlement

The second step in credit card processing where the funds are transferred to the merchant.

Credit Card Network

The system that facilitates the transfer of payment details between the issuing bank and the merchant bank.

Transaction

The exchange of payment for goods or services through a credit card.

Monthly Statement

A document sent from the issuing bank to the cardholder detailing transactions and outstanding balances.