Dictionary of Banking Terms: Bank Card Association
Bank Card Association
organization, owned by financial institutions, that licenses a bank card program or performs transaction processing for its owners. The present-day national card associations, mastercard international and visa, perform four key functions: licensing bank cards and service marks to card issuing banks; authorizing transactions by cardholders; settling interchange transactions when the transaction processing bank (called the merchant bank) is different from the card issuer; and setting the interchange rate, or the transaction processing fee paid by association members. Mailing of new cards and billing to cardholders is done by the banks themselves.
