After work, Martin Meister goes to the supermarket and buys everything he needs for a delicious dinner with his family. The cash register shows a total of CHF 74.30. Martin holds his UBS credit card to the payment terminal and because the amount is over CHF 40, he has to enter his PIN code. He presses “OK” and almost instantaneously the cash register prints out the receipt.
Since most payment terminals today have a dedicated line, the payment process takes virtually no time at all. And yet there’s quite a flow of information in the background before the payment is made. The answer to the question “How does a credit card work?” lies in what is known as the “four-party system". The parties: the customer, the merchant (e.g. Migros or Coop), the acquirer (e.g. SIX) and the card issuer (e.g. UBS Switzerland AG). The card organizations Mastercard and Visa operate the worldwide network that processes transactions and enable this “four-party system”. From the customer’s “OK” to the receipt, it then takes six steps that serve to process the payment and guarantee security.