An issuing bank also known as card issuer is a bank, financial institution or credit union that is affiliated to the card association brands and provides credit or debit cards directly to customers.
The most renowned card association brands are Visa, MasterCard, American Express, and Discover. These brands issue cards in association with those banks affiliated to them. Simply put, they allow issuing banks to grant payment cards with its respective logo. For example: Barclays Visa or Citibank Mastercard.
Indeed, banks issuing credit cards are also known as member banks and they are in charge of setting the credit limit available to the card holder. Furthermore, when it comes to credit cards, this type of banks extend a line of credit to the consumer by writing a letter of credit which purpose is ensuring that interests will be paid on any purchase made by the card user. Among the world's most important credit card issuers are the following: American Express, Bank of America/MBNA, Barclays, Capital One, Chase, Citi, Discover, HSBC, Lloyds TSB/HBoS, and Wells Fargo. At present, Visa and MasterCard lead the credit card market with 70% market share.
Usually, the issuing bank is the one that takes the main responsibility before the acquiring bank for ensuring the payment of debt by the cardholder. However, in line with the card association rules in the specific case of credit cards both the issuing bank and the acquirer share the liability for the debtor’s non-payment.