Function of issuing bank in POS terminal processing

Issuing Bank or Bank Issuer is the bank that issues the debit, credit or prepaid card. The card issuing bank is required to be regulated by a central bank and must be a member of the card organization. It has an essential function in the entire payment process of a payment gateway, since it is the holder of the funds from where during the payment or refund money get transferred to merchant bank account.

The function of the issuing bank is to notify the acquiring bank if the card has enough credit or not to proceed with the purchase. Also it verifies if the card holder has foreign exchange restrictions or restrictions in operational countries. The card brands that card issuing banks usually work with are Visa, MasterCard, Cirrus, Maestro, Amex, Discover JCB, Union Pay and Diners Club.