A typical transaction
There are four parties to each transaction in addition to Mastercard — a cardholder, a retailer, an issuer and an acquirer.
In a typical transaction, a cardholder (or an account holder who may not be using a physical card) purchases goods or services from a retailer. After the transaction is authorised by the issuer, the issuer pays the acquirer an amount equal to the value of the transaction, minus an interchange fee and then posts the transaction to the cardholder's account. The acquirer pays the amount of the purchase, net of a discount to the retailer. The retailer discount rate, among other things, takes into consideration the amount of the interchange fee.
Mastercard connects all parties no matter where a transaction happens — at a physical location, at an ATM, on the internet or through a connected device.
The Mastercard network
Our vast network is behind every transaction ensuring that payments are completed quickly, securely and reliably. The Mastercard network features an intelligent architecture that adapts to the needs of each transaction by blending two distinct processing structures — distributed (peer-to-peer) and centralised (hub-and-spoke). For example, for transactions that require:
Fast processing — think contactless card or a device at a toll booth — we can use the distributed structure, ensuring these transactions are processed close to where the payment occurred.
Value-added processing — such as real-time access to transaction data for fraud scoring — we can use the centralised processing structure, which ensures advanced processing services are applied to the transaction.
Extended processing
Mastercard offers end-to-end processing products and solutions. For example, we offer debit and prepaid issuers a processing platform designed to help create differentiated products and services. And e-commerce retailers can benefit from a single interface that provides the ability to process secure payments and offer value-added solutions.
