Concepts¶

Understand what Card Issuance Processing is and how we define each entity involved in card issuance and processing.

• See industry and QPay terminolgies here
• See how the ledger — the system of record behind every card — fits in here

Issuer¶

In a general sense the issuer is the entity that issues the payment card to a consumer and manages the account of this client.

It is the Issuer that decides if a purcharge is approved or denied, based on balance or credit limit available.

The main Issuer responsabilities are:

• Establish relationship with its client, the cardholder, providing accounts, cards and credit limits upon client's profile analysis
• Decide if it approves transaction from cardholder's card, based on card credit limit, account balance or antifraud score
• Charge its clients with credit card bill
• Manage the credit risk

See how QPay works for Issuers here

Issuer Processor¶

It is role of the Issuer Processor to enable the issuer to properly process a financial transaction originanted from one of the payment card from one of its cardholder. It is also the Issuer processor that issues the card with the appropriate standard to work on Card Networks.

The Issuer Processor integrates with the Card Network following all necessary compliances. It also integrates with a Embosser to produce physically the card.

The main Issuer Processor responsabilities are:

• Integrate to a Card Network to process Payment Cards
• Process card transactions for the Issuer
• Issue and manage payment card life cycle for the Issuer
• Comply with Card Network and PCI-DSS compliances

See how QPay works for Issuer Processors here

Card Network¶

Card Network is an entity that establishes the rules and technological infrastructure for a transaction to take place.

It connects all participants in the payment ecosystem. It enforces the standards of a Card Brand for processing card transactions.

The main Card Network responsabilities are:

• Defines the security rules, communications protocols and fees (such as the interchange fee) that govern the system
• Authorizes and route the transaction when a card is swiped at Acquirer's (POS terminal), ensuring that the transfer message reaches the correct location im milliseconds
• Acts as the judge in cases of disputes or fraud (chargeback)

Embosser¶

Embosser is the entity responsible for physical and digital issuing of the card.

The main Embosser responsabilities are:

• Inserts cardoholder informations on the card plastic like cardholder's name, card number, CVV and expiry date
• Records into card's chip the operational system and the payment applications for contact and contactless presentation
• Manages the cryptography for secure data transmition between the chip, card network and Issuer
• Often, it is responsible for enveloping and mailing the card directly to the customer's address
• It acts as a "tokenization" device, allowing the card to be added to digital wallets such as Apple Pay or Google Pay

Ledger¶

The ledger is the system of record that holds the accounts backing each card. It is what decides whether a purchase has the funds or the credit to proceed, and what records the money movement afterwards.

The ledger is the Issuer's responsibility, but it does not have to be the Issuer's own software. QPay ships an internal ledger that an Issuer can adopt instead of building one, including the full credit-card invoicing lifecycle.

The main Ledger responsabilities are:

• Hold the accounts that back each card, and the balances or credit limits on them
• Decide whether a transaction has the available funds or credit to be approved
• Record every movement under strict double-entry bookkeeping, immutably
• Recognize settled debt, close statements, apply payments and charge interest for credit products
• Keep customer money segregated from the Issuer's own operational money

See how QPay works as a Ledger here

Entities relationship diagram¶

graph LR
    Cardholder[Cardholder]
    Issuer[Issuer]
    Ledger[Ledger]
    Processor[Issuer Processor]
    Network[Card Network]
    Embosser[Embosser]
    Acquirer[Acquirer/Merchant]

    Issuer -->|Contracts services| Processor
    Issuer -->|Contracts services| Embosser
    Issuer -->|Owns or delegates| Ledger

    Processor -->|Integrates with| Network
    Processor -->|Sends card data| Embosser
    Processor -->|Processes transactions| Issuer
    Processor -->|Authorizes against| Ledger

    Embosser -->|Produces physical/digital card| Cardholder

    Network -->|Routes transactions| Processor
    Network -->|Connects to| Acquirer

    Cardholder -->|Has account with| Issuer
    Cardholder -->|Account held in| Ledger
    Cardholder -->|Uses card at| Acquirer
    Acquirer -->|Sends transaction| Network

    style Cardholder fill:#e1f5ff
    style Issuer fill:#fff4e1
    style Ledger fill:#e1f0ff
    style Processor fill:#f0e1ff
    style Network fill:#e1ffe1
    style Embosser fill:#ffe1e1
    style Acquirer fill:#f5f5f5