Procedures For Issuing A Credit Card

The credit card is a commonly used financial tool and its use forms an important part of personal finance. A credit card although is simple to use has a networked system and structure which enables payment through a plastic card with minute chances of misuse and fraud. The credit card industry mainly consists of:

Credit Card Providers: 

Credit Cards providers are very few in numbers. Some of the well-known credit card providers are: MasterCard, VISA, JCB, and American Express etc. The logos of these card providers can be seen on an entry to any store.

Credit Card Issuers:

Financial institutions i.e. banks issue a VISA, MasterCard or any other card-to cardholders. This card will have logos of this financial institution and the card provider & on back of the card magnetic strips for identification.

Credit Card Acquirer:

The Credit card acquirer processes the cards accepted by any merchant and this service is known as credit card processing or merchant account services. Credit card processing not only gives services to acceptance of credit cards alone but also provides the processing of various payment mediums such as: debit cards, electronic cheques, gift cards and other forms of payment whichever is set by banking system.

The credit card processing organization conducts the key task of authorizing the credit card when presented to the merchant immediately. The credit card processing organization afterwards debits the card issuers account for purchase and credits their account with the amount of purchase made by the cardholder from merchant store. This implies that the card issuer should pay the card processing services for the complete transaction. The card services organization (ISO’s) then makes the payment to the merchant after deducting transaction-processing charges.

The different steps that are involved in processing the credit card are as follows:

Verification of the documents from customers

The principle stage of processing the credit card involves the verification of the documents provided by you while you apply for credit card. It is very common in modern era for an individual to submit duplicate documents to acquire the advantage of a credit card & its facilities. The credit card issuing organization gives utmost priority for verifying the address and the income of the applicant during the card processing.

Verification of the credit scores

Credit scores and previous credit history has a major role in setting up the credit limit of the credit card for the client. During the processing of credit card, the officials of the bank check the previous credit history of the applicant from the credit bureau and submit the updated information to the institution for future actions.

Verification of the security

In case of secured credit cards, security plays an important role while setting the credit limit. During credit card processing, the bank officials collect all the information associated with the security. They submit a report related to the security that contains details like the current value of the property, confirmation of the ownership of the property and also the presence or absence of liabilities on the property & real documents pertaining to the property.

Submitting the credit card to the applicant

The final yet the most important step of processing involves the action related to actual providing the credit card to the applicant after verification procedures are completed. This step normally takes a day or two after the completion of verification.

Credit card processing is beneficial for an institution to measure the authenticity of the documentation submitted by the applicant. Simultaneously, the vigor of card processing allows you to understand the authenticity of the credit card issuer. Thus, it avoids scams for both the party institutions as well as user.

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