The parties: who’s involved

• The customer — In order for any transaction to occur, there must be a customer who wants to pay for a product or service with a credit card.
• The merchant — The merchant is the business or individual accepting the credit card payment. The merchant must have a system capable of processing credit card transactions.
• The credit card association — Credit card associations like Visa and MasterCard provide authorization, clearance, and settlement services. Credit card associations partner with the card issuing bank, who provides credit.
• The card issuing bank — The card issuing bank provides credit and the physical credit card to the customer. The card issuing bank also authorizes or declines the transaction depending on a number of factors, most importantly how much credit is available to that customer.
• The underwriting bank — The underwriting bank works with the payment processor to provide a merchant account. The underwriting bank takes on some of the chargeback risk of a business, and provides deposits into the merchant’s bank account. The underwriting bank is sometimes referred to as the acquiring bank
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