Understanding The Payment Industry’s Key Players


The payments industry is a fast-paced industry that is always evolving due to new payment methods, mergers and acquisitions, and technological advancements. We’re seeing payment technology organizations play an increasing influence in the payments sector, especially as technology progresses, and many of them are combining with traditional banking institutions to adapt to the current client and merchant demands.

Innovation is constant and keeping up with changes in payment processing can be difficult. However, there are a few standbys when it comes to the key players who enable consumers and businesses to exchange money for goods and services.


Issuers are banks or other financial institutions that issue credit cards to consumers on behalf of the card networks. The bank names that appear on credit cards are the issuers. They also make payments on behalf of their consumers to the merchant’s bank (the acquiring bank), taking risks in the event that the customer is unable to pay their credit card amount.


Within a credit card network, an acquirer is a bank or financial institution that allows a merchant to accept credit card payments from a customer’s card-issuing bank. Typically, these are referred to as merchant acquirers. An acquirer is a bank that handles credit or debit card payments on behalf of a merchant, although they can also be a payment processor or an Independent Sales Organization. To complete the payment, the acquirer bears the risk and sends the merchant’s transaction details to the card brand associations and issuers.

Credit Card Networks

Visa, Mastercard, American Express, and Discover are card networks that facilitate transactions between customers, merchants, processors, and banks. They control and administer their card network’s regulatory standards, as well as oversee payment processing activities, settlement, and the process of clearing sales.

They charge fees to the issuing and acquiring financial institutions for providing the electronic networks that allow all of the parties to interact and complete transactions. American Express and Discover differ from Visa and Mastercard in that they issue their own credit cards and combine the roles of the merchant bank, card issuer, and card network.

Payment Processors

Payment processors, also known as merchant service providers, are businesses that work behind the scenes to offer consumers payment processing services. Establishing merchant accounts, taking and processing credit, debit, and prepaid card payments, managing credit and debit card processing, and implementing specific anti-fraud measures are a few of their responsibilities.

Payment processors are divided into two categories:

  • Front-End processors are transactions that are routed from the merchant to the cardholder’s bank to request authorization.
  • Back-end processors take front-end processor settlements and route them to the merchant’s issuing bank.

Payment Gateways

A payment gateway is a piece of software that allows merchants to accept credit and debit card payments for in-store and online transactions. Payment information is securely encrypted and transferred between the merchant’s store or website, the bank that processes the payment, and the bank that issued the card used to make the transaction through the payment gateway.

One of the most significant features of a payment gateway is that it adheres to strict security standards to protect cardholder data during transfer. The payment gateway securely delivers the customer’s card information to the payment processor when the consumer uses their payment card.

Independent Sales Organizations (ISO)

ISOs are companies that provide credit card processing services to businesses and operate as a link between businesses, payment processors, and acquiring banks. ISOs manage merchant bank accounts and, in some cases, initiate the relationship between a company and a bank. Businesses can rent point-of-sale terminals from ISOs, and customers with card issues can get help from them. Because an ISO is not a bank, it does not handle merchant funds physically and is not subject to the same regulations.

To Conclude

Despite its intricacies and wide range of institutions and technology, the payment industry is a unified environment that is always evolving. Continued investments and a growing number of mergers and acquisitions are being driven by the industry’s ability to pioneer cutting-edge solutions.

Understanding who the key players are and why they are important can help you make the best business decisions.

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