In a three-party model for card payments, which entities are usually the same?

In the three-party model for card payments, the issuer refers to the financial institution that provides the card to the cardholder, while the acquirer is the bank or financial institution that processes card payments on behalf of the merchant. In many cases, the same financial institution operates as both the issuer and the acquirer, particularly in certain closed-loop systems or networks. This allows for simplified transaction processing since there is a direct relationship between the issuance of the card and the acceptance of payments.

The connection between the issuer and acquirer can enhance efficiency and streamline communication regarding transactions, risk management, and settlement processes. Many banks or financial institutions offer dual services, efficiently managing both roles within the card payment ecosystem.

This reasoning underpins why the choice identifying the issuer and acquirer as usually the same is correct in a three-party model setting.