An Issuing Bank (or issuer) is a bank or financial institution that provides credit cards or debit cards to consumers on behalf of the card networks (like Visa or MasterCard). The issuing bank is responsible for cardholder verification and authorization during transactions.
When a cardholder makes a purchase, the issuing bank verifies the cardholder’s credentials and either authorizes or declines the transaction. It then deducts the purchase amount from the cardholder’s credit limit or account balance.
Additionally, the issuing bank is also responsible for billing the cardholder for their transactions, managing their account, and providing customer service. The relationship between the cardholder and the issuing bank is governed by a cardholder agreement that outlines the terms and conditions of the card use.