The market for payment services offers different financial solutions for monetary transactions. It can be either in cash (paper currency), in electronic banking transactions, in payment slips, or with the use of a card. To enable this process to occur in an integrated format, the following actors have roles and responsibilities in the payment arrangement, such as:

  • Acquirer;
  • Card Scheme;
  • Issuer;
  • Payment Processor.

Acquirer

It is responsible for registering commercial establishments and for providing the resources to capture transactions, such as card machinecard machine - Card machines/readers are popularly known as "maquininhas", in Brazilian Portuguese.s.

Card Scheme

These card schemecard scheme - In Brazil, it is called the "bandeira", i.e. the "flag" of a card.s define the payment arrangement format and they are also legally responsible for the orchestration of payments. They define the rules and the procedures to provide payment services to be available. These rules are:

  • the terms of settlement;
  • the conditions for an institution (either payment or financial institution) to be part of the payment arrangement;
  • the security rules to protect cardholders and business owners from risks (for example, fraud in card cloning, etc.)

Issuer

It is the entity that is allowed to issue cards according to Central Bank of Brazil (BACEN). Issuers must be either a Payment Institution (IP) or Financial Institution (IF) and they are responsible for ensuring the settlement of all participants in the arrangement. The license that enables the issuing of cards belongs to the Issuer and the main responsibilities are to:

  • Issue prepaid cards, debit cards or credit cards;
  • Authorize (or not) transactions;
  • Provide customer assistance and establish a relationship with cardholders;
  • Provide credit in case of credit cards (Financial Institutions only);
  • Ensure establishments receive their payments.

Payment Processor

Their role is to offer the technological robustness to guarantee integration among all the participants in the payment arrangement. Small companies, or companies that do not have their core business in the financial industry, who wish to issue their cards need to contract a payment processor so that all this technology is brought within the payment arrangement.

It is in the payment processor that the transactions will arrive to be validated and authorized (or not) based on rules and validations built within the Issuer.


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