CREDIT CARDS

Group 7

Credit Card Industry – An Overview

Credit Card Industry Growth

Credit card totals include Visa, MasterCard, American Express and Discover

Market Capitalization

Consumer Credit cards issued in 2008

26%

21%13%

13%

8%

6%5% 4% 4%

 Wells Fargo

HSBC

US Bank

USAA 

Barclays 

Target 

GE Money

Advanta 

First National

Ecosystem

Ecosystem

Ecosystem

Ecosystem

External Value Chain

Industry Value ChainIndustry Value Chain

Advertising

Branding

Sales

Advertising

Branding

Sales

Multi Channel

sales

Opportunity identificatio

n

Multi Channel

sales

Opportunity identificatio

n

Credit Card

Tie ups with 3rd parties

Credit Card

Tie ups with 3rd parties

Payment

Clearing

Settlement

Payment

Clearing

Settlement

Technology DevelopmentTechnology DevelopmentHRHR

IT InfrastructureIT InfrastructureRisk Management GuidelinesRisk Management Guidelines

Process model

Card Issuing ServicesCard Issuing ServicesMerchant ServicesMerchant Services

VISA Citi CitiCard

USBank

Amazon

Cardholder makes $50

purchase VISA

Merchant sends the transaction to its merchant

service FI

The Processor sends the

transaction to the VISA network

The network sends the

transaction to the card issuing

institution

The card issuing institution bills the cardholder

$50

The merchant services FI

reimburses the merchant the

transaction less discount of about

2.2%

VISA reimburses the merchant services FI for the transaction

less fees

The card issuing bank

reimburses the network less

interchange fee

Cardholder makes $50

payment on outstanding

balance

$48.65 $0.25 $0.05 $1.05 -$50

Priorities

Application Framework

CustomerCustomer

Web ServerWeb Server

CC Processing Code

CC Processing Code

Clearing House

Clearing House

Customer bank

Customer bank

Merchant Bank

Merchant Bank

Merchant Account

Merchant Account

Challenges

Credit Card-Using ‘e’

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