Four party model – how a typical transaction flows

Almost anyone can use Visa to pay for almost anything, at almost any retailer, in more than 200 countries and territories worldwide.

What makes this possible is the Visa four party model. Visa enables participating consumers, retailers, issuers and acquirers to do business with each other. Visa is the ‘glue’ that binds the whole system together, ensuring that consumers and retailers alike can benefit from convenient, secure cashless payments.

Increasingly, the four parties are joined by many other entities, such as mobile network operators, device manufacturers or technology vendors. Each of these entities provides services on behalf of or in partnership with one of the four parties in the model.

Four party model illustration

Stage 1

The issuer provides the consumer with a Visa account – which could be debit, credit or prepaid. The account could operate via a physical card, a mobile or online only.

Four party model illustration

Stage 2

The consumer selects goods to buy and indicates that they want to pay by Visa.

Four party model illustration

Stage 3

The retailer submits the transaction to the acquirer.

Four party model illustration

Stage 4

The acquirer submits the transaction to the issuer.

Four party model illustration

Stage 5

The issuer approves the transaction – and remits the retail price to the acquirer, less an interchange fee.

Four party model illustration

Stage 6

The acquirer pays the retailer, less a merchant service charge (which is negotiated directly between the acquirer and the retailer).

Four party model illustration

Stage 7

The consumer’s account is debited with the retail price, which appears on their statement.