Which term refers to the bank that extends credit and issues cards to customers on behalf of card networks?

Which term refers to the bank that extends credit and issues cards to customers on behalf of card networks?

• A. Aquirer
• B. Issuer
• C. Gateway
• D. Processor

Answer: (B)

The bank that issues and extends credit to cardholders is the issuer. In card payment ecosystems, the issuer underwrites accounts, approves purchases, and provides the actual credit line to customers. While card networks like Visa or Mastercard enable transactions and route them between issuer and acquirer, they do not issue cards themselves. The acquirer is the merchant’s bank that processes payments on behalf of the merchant and deposits funds. A gateway is the software that connects the merchant’s site or POS to the payment network, and the processor handles the transaction messaging and settlement between issuer and acquirer. So the issuer is the entity that issues the card and extends credit to customers on behalf of the networks, making it the correct term.

The bank that issues and extends credit to cardholders is the issuer. In card payment ecosystems, the issuer underwrites accounts, approves purchases, and provides the actual credit line to customers. While card networks like Visa or Mastercard enable transactions and route them between issuer and acquirer, they do not issue cards themselves. The acquirer is the merchant’s bank that processes payments on behalf of the merchant and deposits funds. A gateway is the software that connects the merchant’s site or POS to the payment network, and the processor handles the transaction messaging and settlement between issuer and acquirer. So the issuer is the entity that issues the card and extends credit to customers on behalf of the networks, making it the correct term.