Look also for a phone number to call to verify information. If you don't have the customer's Visa card in hand -- or you do have it, but it seems fishy -- the place to start is with the card's bank identification number, or BIN, also referred to as the issuer identification number. The BIN is the first six digits of the credit card number. On a card with a number of , the BIN would be Each BIN is assigned to only one issuer.
For Visa cards, the BIN always begins with 4. They had to build an entire backend infrastructure to pay the merchants, so they were their own issuing bank as well as the acquiring bank.
Even to this date, Bank of America continues to be both an issuing bank and an acquiring bank. Many other big banks work the same way. As a merchant, the most important bank for taking credit card payments is the acquiring bank, so it is worth your time to get a deeper understanding of what they are and how they work.
We have a terrific in-depth article on acquiring banks , so be sure to check the article out. As a merchant who accepts credit card payments, however, the issuing bank is only important when a chargeback occurs. If your business experiences very few chargebacks, then you would have to deal with the issuing bank only occasionally. If you have a lot of chargebacks, you would have to deal with issuing banks often, but only indirectly.
Because you do not have direct contact with issuing banks on chargebacks, it could handicap your ability to dispute a chargeback. It is, therefore, not the actual issuing bank that is important to a merchant, but the role of the issuing bank in the credit card processing that is important to the merchant.
How often do you have to deal with issuing banks? Is there an issuing bank you found particularly difficult or easy to work with? Leave us a comment below.
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If the cardholder is then not able to pay off the credit card balance, it falls on the issuing bank to recoup those funds. For that reason, an issuing bank will underwrite consumer applicants to assess their level of credit risk before issuing them a credit card—similar to how an acquiring bank will underwrite each merchant it wishes to process transactions for.
Finally, the issuer is also the bank to whom a consumer will complain if for some reason they wish to dispute a transaction. The issuing bank will research the dispute and, if it sides with the cardholder, it will initiate a chargeback.
While they may not be directly associated with payment facilitators, issuing banks are a critical part of making the entire payments ecosystem work, whose actions and responsibilities should be taken into consideration when managing a merchant portfolio. In one of our previous articles, we explained the role of the Acquiring bank or entity as a financial institution that processes credit and debit card payments on behalf of the merchant.
In this article, we will take a look at what happens from the perspective of the customer and the financial institution that represents and responds for his capacity to pay off debts: the Issuing bank. The Issuing bank is an institution that issues credit and debit cards to customers on behalf of the card networks such as Visa, Mastercard, Discover, American Express and JCB, among others.
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