Case Study of the Credit Card Processing Industry

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Name Course Instructor Date A Case study of the Credit Card Processing Industry The credit card processing industry started in 1914 when a company known as Western Union issued a card known as metal plate to their workers in lieu of a check. The first credit card in a bank was issued by John Biggins, a banker from Brooklyn.


The credit card processing industry has been in the forefront in adopting new technology. Credit card processing is mainly done through electronic processing. The credit card associations and companies have laid down policies and procedures for credit card processing. The system of processing credit cards is very complex as it involves processing transactions hypothetically throughout the payment process system. Usual credit card transaction in involve the following participants: the customer, merchants, payment gateway, acquiring banks processor, credit card interchange, customer’s credit card issuer, and merchant acquiring bank. The settlement for the credit card interchange institutions is done electronically. The computerized transaction settlement systems are used to make payments to the credit card interchange institutions. Today, the main credit card interchanges include MasterCard and Visa .MasterCard and Visa have agents all over the world that persuade merchants to accept transactions using their cards. When a customer makes a purchase at the point of sale, the merchant forwards the transaction at the end of the day to the merchant’s bank. The merchant’s bank pays the merchant for the purchase after deducting a fixed fee before forwarding the purchase to MasterCard or Visa. ...
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