What is modern card issuing in today’s global payment world?

The payment card market is expected to grow to over $275.5 billion worldwide in the coming years, driving the global card issuing space to transform at speed. Fueled by digital disruptors and increased demand for differentiated, modern, and innovative customer offerings, it’s an industry that still has a lot of untapped potential. 

So how does card issuing work in today’s market?

What is card issuing?

Card issuing involves creating tailor-made card programs that suit the evolving needs of consumers today. 

Amongst other services, card issuing involves working with card schemes (Visa, Mastercard), card manufacturers, and issuer processors,  to enable the issuance of physical and virtual cards, reloadable or non-reloadable cards, business expenses, and travel cards, gift or loyalty cards. 

Although card users will interact directly with their issuer (the fintech, bank or financial institution providing them with the banking service), the technical creation of cards and processing of payments takes place behind the scenes by the card issuing ecosystem of partners.

How does global card issuing work?

For credit cards

The issuer is responsible for the relationship between a cardholder and their accounts. This includes reviewing card user applications, mailing and activating cards, issuing card user statements, and enabling payments and purchases.

A card issuer can also offer rewards and benefits, alongside providing reporting on payment history and other information to the credit bureaus.

It’s widely known that consumers can make payments all over the world with their card, as the majority of currencies are accepted by MasterCard or VISA. However, the same movement can’t be expected when brands want to expand their card offering internationally for a new audience. The main criterion that needs to be met when operating within different territories is ensuring that the local country infrastructure and licensing is set up to facilitate card holders requirements.  Each country has its own rules and regulations when it comes to payments, so brand must make sure they adhere to what is expected from region to region.

For debit cards

A debit card is issued by a fintech, bank or financial institution to checking account holders. It allows them to access funds in the account, either as cash from an ATM or to buy goods or services, like a credit card.

Global debit card issuing works on the same principles as credit cards, as it depends entirely on the providers operating within various territories around the world.

Card Acquiring vs Card Issuing vs Payment Processing

Card Acquiring vs Card Issuing

As explained above, card issuing is the process of issuance – whether that’s for physical cards or virtual cards. It takes place at the very beginning of a user’s experience before a transaction can take place, as the customer needs to be set-up to ensure they can make purchases. 

Card acquiring, on the other hand, is where an acquirer accepts card and electronic payments on behalf of a business. In basic terms, they help merchants accept card payments. 

These two processes sit at entirely different ends of the transaction spectrum – one of them being on the card creation and buying half, and the other on the receiving half. They work together to make a transaction happen. 

Card Acquiring vs Payment Processing

A card acquirer maintains the merchant’s account to accept payments for them, whereas a payment service processor (PSP) is only responsible for processing payments. 

Merchants are often not dealing directly with the processor during the payment process. But it’s not uncommon for a merchant to choose to work with both the acquirer and a PSP. 

Why choose Carta Worldwide as one of your global card issuing partners?

Issuer processors, like Carta Worldwide, play an integral role in the card issuing ecosystem. They act as a payment facilitator between the consumer, brand, and the card scheme by committing to the payment of transactions on behalf of cardholders, and by communicating with the relevant partners to authorise or decline transactions on behalf of the card issuer. 

It is vital that businesses understand the benefits of using an issuer processor before committing to building a card program. To help you ask the right questions when on a scoping call with a potential card issuing partner, check out our 5 Things to Consider When Selecting an Issuer Processor blog post.