MBNA Card Services Also Take Care Of Merchant Servicing

2007-03-08 10:33:40

( Financial )



You are familiar with how a credit card works. In a credit card transaction, you pay for purchases using a credit card issued by credit card services companies, like MBNA card services and Discover card services. The merchant swipes the card in the point-of-sale machine; you then sign the receipt, pick up the merchandise and leave the store.

Issuing credit cards and providing credit card services are some of the most common ways in which financial services firms provide credit to you. Financial services conglomerates own card issuers such as MBNA card services and Discover card services.

You may not be familiar with how the credit card industry works. After you depart, your transaction goes to an intermediary financial institution that will pay the merchant for the purchase you made. These institutions are known as merchant services firms, like Redwood Merchant Services, also called merchant acquirers.

They entice merchants to join their network of participating outlets, take care of paying them, and collect from MBNA card services and other card issuers. By paying the merchants promptly, and sometimes extending additional credit to them, merchant acquirers ensure that merchants will always be around when you need to purchase their goods. They get certain fees from the merchants, usually a share in the value of your purchase.

As the card issuer, MBNA card services ensures that merchant services firms are paid promptly, too, usually within a few days. This is done directly to acquirers or through payment associations. MBNA card services collects an interchange fee from acquirers, for transactions made by MBNA card services cardholders at the acquirer’s merchants.

In a matter of a few days, the intermediary transactions are all settled and cleared. What remains is the main contract between you and MBNA card services. You pay for the transaction, in full or on installment, at a later date.


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