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{{Short description|Payment networks linked to payment cards}}
{{
'''Card schemes''' are payment networks linked to [[payment cards]], such as debit or [[credit
[[UnionPay]], [[Visa Inc.|Visa]] and [[Mastercard|MasterCard]] are
==Types==
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[[File:card schemes3.jpg|thumb]]
A three-party scheme consists of three main parties, as described in the adjacent diagram.
In this model, the issuer (having the relationship with the cardholder) and the acquirer (having the relationship with the merchant)
Examples of this setup are [[Diners Club]], [[Discover Card]], and [[American Express]], although in recent times these schemes have also partnered with other issuers and acquirers in order to boost their circulation and acceptance, and Diners Club now operates as a four-party scheme in many regions.<ref>{{Cite web |last=Laurer |first=Christoph |date=2022-03-10 |title=How Online Card-Based Payments Function |url=https://trimplement.com/blog/2022/03/online-card-based-payments/ |access-date=2023-05-24 |website=trimplement blog |language=en-US}}</ref>
===Four-party scheme===
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[[File:card schemes4.jpg|thumb|left]]
In a four-party scheme (also referred to as [[Four Corners Model for Payment Security|Four Corners Model]]), the issuer and acquirer are different entities, and this type of scheme is open for other institutions to join and issue their own cards. This is the type of card scheme used by
==Processes==
=References=▼
The card scheme uses the respective [[guideline]]s<ref name="Mastercard Rules">{{cite web |last1=Summary of changes 2020 |title=Mastercard card scheme - Rules and guidelines |url=https://www.mastercard.us/content/dam/mccom/global/documents/mastercard-rules.pdf |publisher=Mastercard |date=December 2020 |access-date=2021-08-23 |archive-date=2021-08-23 |archive-url=https://web.archive.org/web/20210823112149/https://www.mastercard.us/content/dam/mccom/global/documents/mastercard-rules.pdf |url-status=dead }}</ref><ref name="Visa Rules">{{cite web |last1=Visa core rules 2021 |title=Visa card scheme - Product and service rules |url=https://sr.visa.com/content/dam/VCOM/download/about-visa/visa-rules-public.pdf |publisher=Visa |date=April 2021}}</ref> to process the card exchange data from the acquiring to the [[issuing bank]], and vice versa, until the [[payment]]<ref name="Payments industry ecosystem 2021">{{cite web |title=The payment industry's biggest trends in 2021 |url=https://www.insiderintelligence.com/insights/payments-ecosystem-report/ |publisher=Insider Intelligence |date=July 2021}}</ref> is fully completed (or denied). Credit and [[debit card]]s work with a four-party scheme, completing an open-circle framework that permits consistent flow of transactions; thus, allowing the banks to handle the whole process.
Card schemes aim to make the transaction convenient and automated for all parties involved in the loop, with the core belief that [[Customer|clients]] end up spending more than intended when the payment process is simple.
==Key parties==
===Cardholder===
A cardholder is a [[consumer]], who owns the debit or credit card, issued by their bank, or other financial institution. They aren't legally obliged to use a single card scheme and may own various types of cards, issued by numerous institutions.
===Card issuer===
The [[card issuer]], as the name implies, issues credit, debit, and prepaid cards from any of the available card schemes to all clients who went through a screening process and are, therefore, qualified to own a [[bank account]]. Card issuers can be not only banks but any other certified financial institution.
===Acquiring bank===
The [[acquiring bank]] (also known as obtaining bank), is the [[organization]] that provides administration consent to the merchant and validates their transaction process.
===Merchant===
Any business, or individual, that receives payment based on the product or service, which they offer.
===Payment processor===
The [[Payment processor|payment processing company]] imparts and transfers data for a client's credit or debit card to both the issuing and acquiring bank. The processor likewise checks for security issues, ensuring that the client's card information is right, and all data is entered correctly. Also, the same party deals with incorrect or accidental charges.
===Payment gateway===
A [[payment gateway]] is a key party, responsible for [[online transactions]], passing card data from consumer to merchant, and to a relevant bank through the card scheme. The process usually takes place at [[POS terminal]]s in retail locations, or by means of [[Online payment|online payment services]] for [[website]]s. A payment gateway imparts whether the charge has been processed by the cardholder's bank and moves it further for settlement.
==Fees==
Card scheme [[fee]]s are the expenses that are paid by acquiring banks, which, on the other hand, charge merchants through [[transaction fee]]s. Card scheme fees are not openly uncovered, and no outside parties knows the genuine figure.
Those fees might incorporate quite a few charges, some of which are - fixed or transaction fees, unrelated to the individual payment. Factors, such as the card type, [[payment method]], and geographic area might influence the variable fees.
===Interchange fees===
[[Interchange fee]]s<ref name="Interchange fees between the UK and EEA">{{cite web |title=Mastercard and Visa - revisions to interchange rates between the UK and the EEA |url=https://www.bambora.com/news/mastercard-and-visa-announce-changes-to-interchange-fees-between-the-uk-and-the-eea/ |publisher=Bambora |date=May 2021}}</ref> (or trade fees) are transaction charges that the acquiring bank pays when a payment is being processed via debit or credit card. The expenses are paid to the issuing bank and cover costs, such as processing fees, [[bad debt]], and charges due to risk and potential [[Fraud|fraudulent activities]].
▲== References ==
{{Reflist}}
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{{DEFAULTSORT:Card Schemes}}
[[Category:Credit cards]]
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