ABSTRACT
This chapter establishes a foundational understanding of the mechanics of card payments and introduces the reader to the ecosystem of actors (e.g. acquirers, issuers) and business models (e.g. Three and Four Party Models) that facilitate those payments. It explains the physical structure and data elements of cards and card payment transactions, and highlights the collection of national and international standards (e.g. Chip, 3D Secure, PCI DSS) that define how, when, and by whom card payments are made. More specifically, the authorisation, clearing, and settlement processes will be covered, as well as exception processing (retrievals, refunds, and the infamous chargeback). For ease of understanding, the reader will be provided with simple graphics and terminology mapping, which will show what these concepts mean in real life. Finally, a global market overview (e.g. top acquirers EU and worldwide, top card schemes EU and worldwide) will be given, as well as an explanation of the global market’s dynamics over the last few years (with unexpected statistics) and the drivers for change (e.g. geopolitics, technology, innovation, regulation, etc.).
