A card issuer is exactly what it sounds like — the company that issues your card. Duh, right?
Sure, but there’s more to know about the intricacies of card issuers that’s important to understand if you’re a high-risk merchant navigating the payment landscape for the first time.
That’s because card issuers play an important role in the success of your business. They help facilitate transactions, manage risks, and support business growth.
If you weren’t aware of just how integral they are to a business’s financial and operational success, keep scrolling. We’ll explain what they are, their functions, and how they specifically benefit high-risk businesses.
By the end of this guide, you’ll have a comprehensive understanding of how to leverage card issuers for optimized payment processes and enhanced security, as well as how to integrate mobile wallets into your payment system.
What is a Card Issuer?
A card issuer is a financial institution, typically a bank, that provides credit cards or debit cards to consumers.
A few of the main responsibilities these institutions have are:
- Extending credit to cardholders
- Setting terms and conditions
- Ensuring the smooth processing of card transactions
In this context, you can see the important role card issuers play in the payment ecosystem. They’re responsible for facilitating the movement of funds between merchants and customers, making it possible for transactions to occur seamlessly and securely.
What Do Card Issuers Do?
Card issuers perform several key functions:
- Issuing Cards: They provide consumers with credit or debit cards
- Extending Credit: They offer lines of credit to cardholders and manage repayment terms
- Transaction Processing: They authorize and process card transactions, ensuring funds are transferred from the cardholder’s account to the merchant
- Risk Management: They implement fraud prevention measures and manage chargebacks to protect both merchants and cardholders
These functions might seem pretty basic, and at the core they kind of are.
However, they’re important for maintaining a robust and secure payment environment, especially for high-risk merchants who are more exposed to fraudulent activities and chargebacks.
The Difference Between Card Issuers and Card Schemes
While card issuers and card schemes are both components of the payment ecosystem, they serve different functions.
Card issuers are banks or financial institutions that issue cards to consumers and manage the associated credit or debit accounts.
Card schemes, such as Visa, MasterCard, and American Express, provide the network infrastructure for processing card transactions globally.
For example, when a customer uses a Visa card issued by their bank, Visa facilitates the transaction between the merchant and the issuing bank.
Understanding this distinction can help you choose the right partners for your business needs (and ensure you know what you’re talking about when you do speak to potential providers).
But How Do Card Issuers Work with Businesses?
Card issuers allow businesses to accept card payments, which is essential for both brick-and-mortar stores and online merchants.
The process begins with setting up a merchant account through an acquiring bank, which collaborates with the card issuer to facilitate transactions.
This involves integrating card issuer services with the business’s existing payment systems, ensuring seamless processing of credit and debit card payments.
For standard businesses (i.e., those not deemed high-risk), card issuers provide necessary support such as transaction authorizations, fraud detection, and chargeback management.
They also offer various value-added services like detailed transaction reports, customer insights, and loyalty programs.
These tools help businesses manage their finances more effectively, but they also help enhance the customer experience by ensuring secure and efficient payment processing.
And How Do They Cater to High-Risk Merchants?
High-risk merchants, on the other hand, face unique challenges that require specialized support from card issuers.
These businesses often deal with higher instances of fraud and chargebacks, making risk management a top priority.
That’s why most card issuers (at least the ones that work with high-risk businesses) support high-risk merchants by offering advanced fraud prevention tools, such as real-time transaction monitoring and BIN data analysis.
These tools help:
- Identify suspicious activities early
- Minimize potential losses
- Protect the merchant’s reputation
Additionally, card issuers work closely with high-risk merchants to develop tailored chargeback mitigation strategies.
This includes providing detailed reporting and analytics to understand chargeback patterns and implementing measures to reduce their occurrence.
Our best piece of advice here, though?
Choosing a card issuer that understands the specific needs of high-risk industries ensures you’re better equipped to navigate the complexities of payment processing with confidence and efficiency — the latter of which is critical if you want to not just stay afloat but actually grow your business sustainably over time.
💡 Interested in learning more about the tailored chargeback prevention strategies mentioned above? Check out our comprehensive guide on The 8 Best (Tested) Chargeback Prevention Tips for High-Risk Businesses. Or, read a helpful tip from our founder below!
One of the easiest ways to prevent chargebacks is to offer great customer service and high-quality products. If you're an EU-based business, for example, we've seen that it's always better to have a warehouse in Europe, so you can ship faster. Also, ensure your product is great, so you're getting happy customers who receive something of quality.
Where to Find Your Credit Card Issuer
The name or logo of the card issuer is usually featured on the credit card itself.
Look for familiar names or logos, such as those of your bank, credit union, or credit card company.
You may also look for the bank identification number (BIN) and look up the first 6 digits on your card.
If you still can’t find it, review your latest credit card statement and look for details such as the name of the issuing bank or credit card company.
There should also be contact information for customer service in case you need to clarify any questions.
Now, Learn to Leverage Card Issuers for Business Growth
Now that you know who your card issuer is, how can you use that information for more than just payment processing?
Here are a few features you’ll want to ensure you’re getting good use out of (or, at the very least, ask your merchant account services provider about if your card issuer doesn’t offer them).
Advanced Fraud Prevention
Advanced fraud prevention tools, such as real-time transaction monitoring and BIN data analysis, help protect against fraudulent activities, ensuring a safer transaction environment for you and your customers.
Safety is important when processing your customers’ payments as it’s one of the biggest factors that build trust with them over time and can help encourage repeat business.
Analytics & Reporting
Card issuers also often offer detailed analytics and reporting services that provide insights into transaction patterns and consumer behavior.
Don’t sleep on this. Analyze that data to make informed decisions about marketing strategies, inventory management, and customer engagement.
Use as much information from those insights to tailor your offerings and improve operational efficiency.
Mobile Wallets
Card issuers also make it possible to offer mobile wallets and other ‘newer’ payment methods.
This is important because accepting mobile wallets like Apple Pay and Google Wallet can help you attract a broader customer base and streamline the checkout process, leading to (you guessed it) increased sales and customer loyalty (are you starting to see a trend here?).
Okay, But How Do Card Issuers Connect to High-Risk Merchant Account Services?
We’re getting there! But great question. After all, we’re a high-risk merchant services provider, so why are we talking about card issuers if we don’t issue cards?
When a high-risk business sets up a merchant account, the process typically begins with finding an acquiring bank that is willing to work with high-risk merchants.
That acquiring bank will then collaborate with card issuers to allow you to accept credit and debit card payments.
Card issuers contribute to this process by offering helpful risk management tools that can (in some cases) mitigate the very unfortunate and specific challenges faced by high-risk merchants.
This added layer of security is essential for high-risk businesses that are more susceptible to fraud (which is honestly most high-risk businesses, but certain high-risk niches are definitely even more susceptible).
💡 Ultimately, card issuers are great partners for high-risk merchant account services (which you can learn more about in high risk merchant account provider!), providing the technological infrastructure, risk management tools, and strategic support needed to ensure secure and efficient payment processing.
How to Choose the Right Card Issuer for Your High-Risk Business
Ready to choose a card issuer? Here are some key factors we recommend all our merchants look for:
- Experience with High-Risk Industries: Choose a card issuer with a proven track record in managing high-risk transactions.
- Fraud Prevention: Look for issuers that offer robust fraud detection tools and real-time monitoring to protect against fraudulent activities.
- Chargeback Management: Ensure the issuer provides comprehensive chargeback mitigation services, including detailed analytics and proactive strategies.
- Integration Capabilities: Verify that the card issuer can seamlessly integrate with your existing systems and support mobile wallet payments.
- Transparent Pricing: Choose issuers with competitive rates and clear fee structures to avoid unexpected costs.
Our biggest tip here is not to rush the process. Evaluate which factors are most important to you and select a card issuer that meets your specific needs and supports your business growth.
Contact FastoPayments for High-Risk Merchant Account Services
Partnering with FastoPayments ensures access to tailored solutions designed for high-risk merchants.
With FastoPayments, you gain access to expert guidance, advanced fraud prevention tools, and reliable support to navigate the complexities of high-risk merchant account services.
Let’s work together to secure and grow your business.
