Analysis of the Credit Card Industry

The purpose of this paper is to give insights into the credit card industry from a business and an information systems perspective. It will cover the high-level architecture in place used for processing credit card payment transactions in ecommerce and POS scenarios, including an overview of the IT-systems involved. Furthermore the difference between two business models for credit card associations is highlighted through a comparison of the bank-centric model of VISA/MasterCard and the hybrid model pursued by American Express (Amex). In this context it will also become clear how banks issuing and promoting credit cards make profits and which costs they incur. In the end this paper will provide an overview of external interfaces required to connect several systems to the credit card network to provide additional information and added value to involved parties.

Credit Card Industry

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