Payments Training Hub
Credit card lets the cardholder borrow money PAYMENT OPERATIONS STARTED LIVE 01 Credit card lets the cardholder borrow - from the issuing bank up to an ACTIVE 02 Charge card - full each month QUEUED 03 Prepaid cards - parent can load EUR 200 for a teenager QUEUED 04 Cashback - cardholder, and loyalty points convert QUEUED 05 Card type - business analyst QUEUED 06 Testing - must cover each card type separately QUEUED A credit card lets the cardholder borrow money from the issuing bank up to an agreed credit limit Step 1 of 6 Credit card lets the cardholder borrow money STARTED Credit card lets the cardholder borrow from the issuing bank up to an agreed credit ACTIVE Charge card full each month QUEUED Prepaid cards parent can load EUR 200 for a teenager QUEUED Cashback cardholder, and loyalty points convert QUEUED Card type business analyst QUEUED Testing must cover each card type separately QUEUED A credit card lets the cardholder borrow money from the issuing bank up to an agreed credit limit
Charge card must be repaid PAYMENT OPERATIONS IN PROGRESS LIVE 01 Credit card lets the cardholder borrow - from the issuing bank up to an DONE 02 Charge card - full each month ACTIVE 03 Prepaid cards - parent can load EUR 200 for a teenager QUEUED 04 Cashback - cardholder, and loyalty points convert QUEUED 05 Card type - business analyst QUEUED 06 Testing - must cover each card type separately QUEUED A charge card must be repaid in full each month, and a commercial card is issued to a business for employee spending, travel and procurement. Step 2 of 6 Charge card must be repaid IN PROGRESS Credit card lets the cardholder borrow from the issuing bank up to an agreed credit DONE Charge card full each month ACTIVE Prepaid cards parent can load EUR 200 for a teenager QUEUED Cashback cardholder, and loyalty points convert QUEUED Card type business analyst QUEUED Testing must cover each card type separately QUEUED A charge card must be repaid in full each month, and a commercial card is issued to a business for employee spending, travel and procurement.
Prepaid cards exist to limit exposure PAYMENT OPERATIONS IN PROGRESS LIVE 01 Credit card lets the cardholder borrow - from the issuing bank up to an DONE 02 Charge card - full each month DONE 03 Prepaid cards - parent can load EUR 200 for a teenager ACTIVE 04 Cashback - cardholder, and loyalty points convert QUEUED 05 Card type - business analyst QUEUED 06 Testing - must cover each card type separately QUEUED Prepaid cards exist to limit exposure, so a parent can load EUR 200 for a teenager, or a company can load EUR 500 for a conference trip, without risking the main account. Step 3 of 6 Prepaid cards exist to limit exposure IN PROGRESS Credit card lets the cardholder borrow from the issuing bank up to an agreed credit DONE Charge card full each month DONE Prepaid cards parent can load EUR 200 for a teenager ACTIVE Cashback cardholder, and loyalty points convert QUEUED Card type business analyst QUEUED Testing must cover each card type separately QUEUED Prepaid cards exist to limit exposure, so a parent can load EUR 200 for a teenager, or a company can load EUR 500 for a conference trip, without risking the main account.
Cashback returns a small percentage of spending PAYMENT OPERATIONS IN PROGRESS LIVE 01 Credit card lets the cardholder borrow - from the issuing bank up to an DONE 02 Charge card - full each month DONE 03 Prepaid cards - parent can load EUR 200 for a teenager DONE 04 Cashback - cardholder, and loyalty points convert ACTIVE 05 Card type - business analyst QUEUED 06 Testing - must cover each card type separately QUEUED Cashback returns a small percentage of spending to the cardholder, and loyalty points convert spending into rewards, so both need accrual, redemption and expiry logic. Step 4 of 6 Cashback returns a small percentage of spending IN PROGRESS Credit card lets the cardholder borrow from the issuing bank up to an agreed credit DONE Charge card full each month DONE Prepaid cards parent can load EUR 200 for a teenager DONE Cashback cardholder, and loyalty points convert ACTIVE Card type business analyst QUEUED Testing must cover each card type separately QUEUED Cashback returns a small percentage of spending to the cardholder, and loyalty points convert spending into rewards, so both need accrual, redemption and expiry logic.
Card type PAYMENT OPERATIONS IN PROGRESS LIVE 01 Credit card lets the cardholder borrow - from the issuing bank up to an DONE 02 Charge card - full each month DONE 03 Prepaid cards - parent can load EUR 200 for a teenager DONE 04 Cashback - cardholder, and loyalty points convert DONE 05 Card type - business analyst ACTIVE 06 Testing - must cover each card type separately QUEUED For a business analyst, the card type decides the questions to ask in a requirements workshop, and getting it wrong creates rework later. Step 5 of 6 Card type IN PROGRESS Credit card lets the cardholder borrow from the issuing bank up to an agreed credit DONE Charge card full each month DONE Prepaid cards parent can load EUR 200 for a teenager DONE Cashback cardholder, and loyalty points convert DONE Card type business analyst ACTIVE Testing must cover each card type separately QUEUED For a business analyst, the card type decides the questions to ask in a requirements workshop, and getting it wrong creates rework later.
Testing: missing PAYMENT OPERATIONS COMPLETE LIVE 01 Credit card lets the cardholder borrow - from the issuing bank up to an DONE 02 Charge card - full each month DONE 03 Prepaid cards - parent can load EUR 200 for a teenager DONE 04 Cashback - cardholder, and loyalty points convert DONE 05 Card type - business analyst DONE 06 Testing - must cover each card type separately ACTIVE Testing must cover each card type separately, because a test that passes for debit can still fail for credit when the limit logic is missing. Step 6 of 6 Testing: missing COMPLETE Credit card lets the cardholder borrow from the issuing bank up to an agreed credit DONE Charge card full each month DONE Prepaid cards parent can load EUR 200 for a teenager DONE Cashback cardholder, and loyalty points convert DONE Card type business analyst DONE Testing must cover each card type separately ACTIVE Testing must cover each card type separately, because a test that passes for debit can still fail for credit when the limit logic is missing.

Key points of this lesson, in order.

0:00 / 3:23 Step 1 of 6

Types of Payment Cards and Their Services

Card Payments Deep Dive, Lesson 1 of 7, Narration 3:23, D08 Cards and alternative payments

InterchangeIssuer

What you will learn

Your objective. By the end of this lesson, you will be able to explain types of payment cards and their services. A credit card lets the cardholder borrow money from the issuing bank up to an agreed credit limit, and the cardholder repays the balance later, either in full or in monthly instalments with interest.

Why it matters. For a business analyst, the card type decides the questions to ask in a requirements workshop, and getting it wrong creates rework later.

Chapter objective: From card types to clearing and settlement

Key learning points

  • Credit card lets the cardholder borrow money
  • Charge card must be repaid
  • Prepaid cards exist to limit exposure
  • Cashback returns a small percentage of spending
  • Card type
  • Testing: missing

Key terms

Interchange: A fee paid by the acquirer to the issuer for each card transaction, set by the card scheme. It compensates the issuer for handling the transaction, funding the interest free period and managing fraud...

Issuer: A bank or licensed institution that issues payment cards to customers and holds their accounts. It authorises transactions, debits cardholder accounts, and manages credit limits and fraud controls.

Payment flow diagram showing Types of Payment Cards and Their Services.

Practise this lesson

Exercise

Trace the card payment in this lesson through authorisation, clearing and settlement.

Use the four-party model and the stage timings in this lesson.

  1. What to do. State what happens at each stage, who pays whom, and when the merchant is actually credited.

Correct result. Authorisation holds the funds and returns a response code. Clearing sends the transaction in a batch file. Settlement moves the net amount between banks, and the acquirer credits the merchant after deducting interchange, scheme fees and its margin.

Why. A card payment is not one event. The customer sees it on Monday, the merchant gets it on Wednesday, and the difference is the clearing and settlement cycle.

Check your understanding

Practice question

A card payment is authorised, then the customer cancels the order before the merchant ships. The merchant wants to return the funds without a chargeback. What should they do?

Takeaway and next step

What to remember

For a business analyst, the card type decides the questions to ask in a requirements workshop, and getting it wrong creates rework later.

Follow EUR 200 through every stage, from instruction to beneficiary credit, and note where it can stop.

Open the Payment Lifecycle Simulator →

Builds on "Worked Example: EUR 89.99 Monthly Utility Collection, End to End and How to Test It".

Transcript and full text

Show transcript

A credit card lets the cardholder borrow money from the issuing bank up to an agreed credit limit, and the cardholder repays the balance later, either in full or in monthly instalments with interest. The issuing bank carries the credit risk, because it pays the merchant even if the cardholder later fails to repay. A debit card works differently, because it draws money directly from the cardholder current account at the moment of the transaction, so the cardholder can only spend what is in the account plus any agreed overdraft. A prepaid card is loaded with funds before use, and spending stops when the loaded balance runs out, which makes it useful for travel, gifts and controlled expenses. A charge card must be repaid in full each month, and a commercial card is issued to a business for employee spending, travel and procurement. Each card type exists because a different user need sits behind it, and a business analyst who confuses them will design the wrong flow. Credit cards exist to give consumers short term borrowing and a buffer between purchase and payment, which is why they carry interest, minimum payments and credit checks. Debit cards exist to give consumers direct access to their own money, which is why they need no credit check and carry no interest. Prepaid cards exist to limit exposure, so a parent can load EUR 200 for a teenager, or a company can load EUR 500 for a conference trip, without risking the main account. Charge cards exist for customers who want payment convenience without revolving credit, and commercial cards exist so a company can control, track and reconcile employee spending in one place. Card services add value on top of the basic payment, and they change what the payments team must build and support. Instalment plans let a cardholder split a EUR 120 purchase into three monthly payments of EUR 40, which needs a loan record, a repayment schedule and interest rules in the issuer system. Cashback returns a small percentage of spending to the cardholder, and loyalty points convert spending into rewards, so both need accrual, redemption and expiry logic. Commercial cards add controls such as spending limits per employee, merchant category blocks and approval workflows, so a finance team can stop a hotel booking above EUR 300 without stopping a taxi fare. Contactless payments, tokenised card numbers for mobile wallets and virtual cards for online shopping are also services, and each one changes the data exchanged and the fraud controls that apply. For a business analyst, the card type decides the questions to ask in a requirements workshop, and getting it wrong creates rework later. A credit card flow needs credit limit checks, interest calculation, minimum payment rules and a statement cycle, while a debit card flow needs real time balance checks against the current account and overdraft rules. A prepaid card flow needs a load process, a balance ledger and a rule for what happens to unused funds, while a commercial card flow needs hierarchy, approval limits and expense reporting. A product owner should also consider who pays for the service, because instalments and cashback cost the issuer money, and those costs are recovered through interchange, interest or annual fees. Testing must cover each card type separately, because a test that passes for debit can still fail for credit when the limit logic is missing.

A credit card lets the cardholder borrow money from the issuing bank up to an agreed credit limit, and the cardholder repays the balance later, either in full or in monthly instalments with interest. The issuing bank carries the credit risk, because it pays the merchant even if the cardholder later fails to repay. A debit card works differently, because it draws money directly from the cardholder current account at the moment of the transaction, so the cardholder can only spend what is in the account plus any agreed overdraft. A prepaid card is loaded with funds before use, and spending stops when the loaded balance runs out, which makes it useful for travel, gifts and controlled expenses. A charge card must be repaid in full each month, and a commercial card is issued to a business for employee spending, travel and procurement.

Each card type exists because a different user need sits behind it, and a business analyst who confuses them will design the wrong flow. Credit cards exist to give consumers short term borrowing and a buffer between purchase and payment, which is why they carry interest, minimum payments and credit checks. Debit cards exist to give consumers direct access to their own money, which is why they need no credit check and carry no interest. Prepaid cards exist to limit exposure, so a parent can load EUR 200 for a teenager, or a company can load EUR 500 for a conference trip, without risking the main account. Charge cards exist for customers who want payment convenience without revolving credit, and commercial cards exist so a company can control, track and reconcile employee spending in one place.

Card services add value on top of the basic payment, and they change what the payments team must build and support. Instalment plans let a cardholder split a EUR 120 purchase into three monthly payments of EUR 40, which needs a loan record, a repayment schedule and interest rules in the issuer system. Cashback returns a small percentage of spending to the cardholder, and loyalty points convert spending into rewards, so both need accrual, redemption and expiry logic. Commercial cards add controls such as spending limits per employee, merchant category blocks and approval workflows, so a finance team can stop a hotel booking above EUR 300 without stopping a taxi fare. Contactless payments, tokenised card numbers for mobile wallets and virtual cards for online shopping are also services, and each one changes the data exchanged and the fraud controls that apply.

For a business analyst, the card type decides the questions to ask in a requirements workshop, and getting it wrong creates rework later. A credit card flow needs credit limit checks, interest calculation, minimum payment rules and a statement cycle, while a debit card flow needs real time balance checks against the current account and overdraft rules. A prepaid card flow needs a load process, a balance ledger and a rule for what happens to unused funds, while a commercial card flow needs hierarchy, approval limits and expense reporting. A product owner should also consider who pays for the service, because instalments and cashback cost the issuer money, and those costs are recovered through interchange, interest or annual fees. Testing must cover each card type separately, because a test that passes for debit can still fail for credit when the limit logic is missing.

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