A card issuer, also known as an issuing bank, is a financial institution that provides credit or debit cards to consumers and businesses. Examples of card issuers include banks like JPMorgan Chase, Bank of America, and Citibank, as well as credit unions and prepaid card providers. These institutions are responsible for approving credit card applications, setting credit limits, and maintaining cardholder accounts. They also handle billing, collect payments from cardholders, and bear the financial risk if a cardholder defaults on their payments.
Card issuers assume financial responsibility for all transactions made on card holders’ accounts, and interact with several other institutions during each card transaction. When a cardholder makes a purchase, the transaction details flow from the merchant through their acquiring bank to the card scheme (e.g. Visa, Mastercard). The card scheme then routes the authorization request to the card issuer. The issuer verifies the account status, checks available funds, and conducts fraud checks before approving or declining the transaction.
This response travels back through the same chain to complete the sale. Later, during settlement, the card issuer transfers funds to the acquiring bank via the card scheme, which then deposits the money into the merchant's account. Other roles performed by card issuers include:
Card issuers are distinct from - but often confused with - card schemes (such as Visa and Mastercard). Both institution types work in partnership to offer branded payment cards typically bearing each logo. While the issuer extends credit to the cardholder and manages the account, the card scheme provides and regulates the payment infrastructure and processes card payments. It should be noted that, while relatively uncommon, some companies, like American Express and Discover, act as both card issuers and card schemes.
Payment service providers (PSPs) also work closely with - but are distinct from - card issuers and card schemes. Like issuers and schemes, they act as intermediaries between the card holder and merchant. PSPs provide software and hardware that allows merchants to take payment from card holders, offering services such as payment gateways, payment processing, merchant accounts, and fraud prevention and reporting.
While chargebacks can prove devastating to merchants, costing up to 25% of net income, the chargeback dispute process can also be very costly and time-intensive. This is in part due to the complexities of consolidating and providing evidence to card issuers. Each issuer operates in different ways, with particular biases, time constraints, and evidence preferences. The template formats of most chargeback dispute solutions totally fail to account for these vital distinctions, leading to high rates of lost cases.
Justt’s dynamic chargeback representments deliver maximal win rates. This is because evidence is tailored to the nuances of the particular card issuer, reason code, card scheme and more. Detailed knowledge of how each card issuer operates is combined with AI learning that discerns which kinds of arguments are most successful with each issuer, and optimizes evidence accordingly. Justt’s automated system instantly draws data from acquiring banks, the merchant, and third party sources - presented as the optimal evidence to win the dispute.
No business can afford to take risks with chargebacks. Nor is it feasible for merchants to learn the intricacies of how every issuer responds to chargebacks - especially not when Justt can do it automatically, hyper-effectively, and at a fraction of the cost.Â
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