Institutional Roles in Issuing and Processing Credit Cards

The institutions involved in processing your credit credit and how they relate to each other

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Tuesday, June 8th, 2010 Credit Cards

18 Comments to Institutional Roles in Issuing and Processing Credit Cards

  1. what a perfect you …
    what a perfect you are sal..
    please sal keep teaching and teaching millions of people waiting ..
    what a power you give them …
    please sal we need lesson about greece problem and europe in general…

    thanks

  2. motasael on June 8th, 2010
  3. does this mean …
    does this mean paying with credit card much more expensive than cash? hmm..but how come when i pay cash or credit its the same amount? to me card is much easier to carry around.

  4. ochaiscream on June 8th, 2010
  5. @pendulousphallus

    @pendulousphallus
    There bills are often sent in PAPER as well as the JUNK AD’s…

  6. timetraveler3797 on June 8th, 2010
  7. @o2wow Pay with …
    @o2wow Pay with credit cards, you will look cooler and save all the trees.

  8. pendulousphallus on June 8th, 2010
  9. Pay in cash, you …
    Pay in cash, you will spend less money and save all fees.

  10. o2wow on June 8th, 2010
  11. @qubitrabbit Not if …
    @qubitrabbit Not if your information processing laws are sound (and enforced).

    Normally, these communications are rather heavily encrypted. The grocery store would query the network, bank B and bank A for their public keys, and encrypt the data on a “need-to-know” basis.

    In principle, the network only needs to know who to send the message to. In practise, precisely how much the network needs to know depends on their policies and your country’s data security laws (and enforcement thereof).

  12. ThatIsNotDeadWhich on June 8th, 2010
  13. @picapauengracado

    @picapauengracado

    There is nothing “natural” about interest rate in credit card industry… It’s all games.

    No worries – this ponzi scheme and all the other ones will be over very soon…

  14. rushin2 on June 8th, 2010
  15. How does it work …
    How does it work with the information privacy? Do processors get all the information about our bank accounts?

  16. qubitrabbit on June 8th, 2010
  17. @chris1816
    The …

    @chris1816
    The interest rate is the natural result of the supply and demand of savings, as well as risk. Credit card companies charge higher interest rate than other lenders because of the risk involved. Many people fail or defer payments, so those who do must cover for those who don’t. That’s why as your rating falls, interest raises.
    If credit card lending was more profitable than other lending, then every lender company would replace their business by a credit card one.

  18. picapauengracado on June 8th, 2010
  19. @haobio

    @haobio
    Advertisement? If they merely wanted to teach you finance, then they wouldn’t bother making sure khan would put their logo there.

  20. picapauengracado on June 8th, 2010
  21. @superdau
    One law …

    @superdau
    One law of economics is that when there is free entrance, profits equalize. If banks really were a more profitable business, then everybody would invest in banks pressuring their profits down, and everybody else’s up.

  22. picapauengracado on June 8th, 2010
  23. Forgive my …
    Forgive my ignorance, but why does Visa want to partner with educators to teach us about financial literacy?

  24. haobio on June 8th, 2010
  25. That’s not orange …
    That’s not orange though, it’s pink. Sorry, just a trivial correction.

  26. haobio on June 8th, 2010
  27. @chris1816
    Banks …

    @chris1816
    Banks are always the winners. Except for the case where you keep all your money in cash, they control almost everything. And everything has a fee attached to it, while just shifting numbers in a computer network. I gotta start my own bank ;-)

  28. superdau on June 8th, 2010
  29. Salzburg?
    I’m in …

    Salzburg?
    I’m in Salzburg, Austria. ;-) Credit cards aren’t that common here. We have other kinds of electronic payment with much lower fees than credit cards.

  30. superdau on June 8th, 2010
  31. You know, I was …
    You know, I was wondering how the heck this system worked just a few days ago!
    Now I know. :)

  32. thepoet82 on June 8th, 2010
  33. The biggest winners …
    The biggest winners here are the banks. They get the interchange rate plus the interest they charge you from your payments.

  34. chris1816 on June 8th, 2010
  35. Sal,
    Thanks for …

    Sal,
    Thanks for returning to financial issues. I’ve been fascinated by all your videos, tell everyone I know (or who will listen) about the Khan Academy, and was hoping that you’d start a new playlist covering one of my favorite subjects. I’d love to hear your thoughts about the financial crisis in Europe, the current success or failure of the Geithner plan, an analysis of the CA state budget crisis, the stock market ‘typo’ that cause a minor problem a couple of weeks ago, etc.
    Thanks, Chuck

  36. MyChuck12345 on June 8th, 2010

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